By Erica C. Barnett

The outgoing city council is making its final amendments to Mayor Bruce Harrell’s proposed 2024 budget—the final city budget for six of the council’s nine members, and the final year of budgeting before the city enters a period of ongoing $200 million-plus “structural” deficits resulting from a combination of increased costs (construction prices, for instance) and lower revenues from volatile sources, such as taxes on real estate transactions.

Members of the council’s progressive bloc flexed their muscles on some issues, such as funding pay increases for human-service workers, while capitulating on others, like Councilmember Sara Nelson’s proposal to direct $300,000 in city funds to private addiction treatment companies.

Here are some of this week’s budget highlights:

• Although the council plans to wait until after they pass next year’s budget before taking up new tax proposals to address the structural deficit, the biggest progressive win this year is a small tax increase that will fund something entirely new. Councilmember Kshama Sawant, who is leaving at the end of the year, proposed and pyearassed a 0.1 percent (0.001) increase to the JumpStart payroll tax to fund mental health counseling and community-based programs for kids in Seattle Public Schools. The tax increase will increase annual revenues from the tax by $20 million, making this new program by far the biggest new investment in this year’s budget.

Sawant’s mental-health proposal had a compelling constituency. On Monday, dozens of current and former public school students testified at a budget hearing about the high rates of mental illness, depression, and suicide among their peers, making a convincing for a large new investment at a time when other needs—such as wage increases for thousands of city workers—remain unmet. Sawant did propose two amendments that would establish a fund to sustain worker pay increases in the future, but neither passed.

• Two proposals to address wage inequity between human services workers that were initially part of the council’s “consent package“—amendments the council has already hashed out and agreed collectively to support—got pulled out for further discussion by Councilmember Sara Nelson. Both amendments, which ultimately passed, addressed a problem that emerged when the city handed its homelessness contracts to the King County Regional Homelessness Authority: Although a 2019 law requires the city to fund annual inflationary adjustments for all the human services contracts it funds, a small number of contracts are funded directly by the federal government and aren’t subject to the annual pay increase requirement. The amendments will bring worker pay under those contracts in line with other human service workers.

Nelson argued that the changes, which will cost the city about $2 million next year, create an ongoing obligation without identifying a specific funding source to pay for it, and said the contracts were now the KCRHA’s responsibility, not the city’s. “We no longer have a statutory obligation to pay an inflationary adjustment,” Nelson said. “I understand that that is a desire, but again, we’re talking about another agency, and we’re not really responsible for how they run their books.” In response, council budget chair Teresa Mosqueda noted that the city is the KCRHA’s primary funder, and that the agency has no ability to raise money on its own “When we transferred these contracts, the intent was to ensure that there was inflationary adjustment and wage stability … no matter who held that contract,” Mosqueda said. 

Later in the afternoon, Nelson raised objections to a proposal by Herbold that would require agencies to demonstrate that they’re using city funds dedicated to annual wage increases for that purpose. Nelson argued that the city shouldn’t be assuming annual wage increases in the first place, but should base cost-of-living adjustments on performance standards.

Citing a column by Seattle Times columnist Danny Westneat, Nelson noted that recent polls showed the council has a low approval rating and that voters don’t trust the city to spend their money well—a comment that prompted Mosqueda to retort that if the city fails to pay social service workers enough to live here, “more of the very people that continue to serve our most vulnerable will themselves be unhoused, living in cars, living paycheck to paycheck, and that’s not how we create sustainability.”

• A 10-cent fee on app-based “network” companies like Doordash passed after a lengthy debate over which companies should be subject to the fee, whether the fee was too large, and who should have the authority to increase the fee in the future. Councilmember Lisa Herbold sponsored the underlying legislation, which applies to all app-based workers except Uber and Lyft drivers (who are now subject to a preemptive state law), along with an amendment that would reduce the fee for so-called “marketplace” network companies like Rover and TaskRabbit. These companies aren’t subject to minimum-pay requirements that apply to other gig-work companies because they allow workers to set their own rates and give workers more autonomy over which jobs they accept.

Nelson and Councilmember Alex Pedersen, who is leaving at the end of the year, both unsuccessfully attempted to water down the legislation. Pedersen’s failed amendments would have exempted marketplace companies from the fee and required council approval for any fee increase— a departure from the current system, in which the Department of Finance and Administrative Services (FAS) can increase or decrease many city fees on their own.

Nelson, meanwhile, proposed amendments that would prohibit the Office of Labor Standards to use fee revenue to implement the city’s minimum pay ordinance and cut the 10-cent fee in half. Both councilmembers’ proposals failed by narrow margins.’

• After the council rejected Harrell’s proposal to fund a gunshot detection system last year, the council appears ready to invest $1.5 million in a “pilot” that will include CCTV cameras in addition to audio surveillance devices. The system is generally referred to as Shotspotter after the company that provides the only widely used gunshot detection system.

As we’ve reported, Shotspotter is not a new or innovative technology, nor does it “detect” gunfire on its own. Instead, sensors installed on utility poles detect and determine the approximate location of outdoor sounds that resemble gunfire and alert human “acoustic experts” who listen to the audio and determine which ones sound like gunshots. These experts then alert police, who can be dispatched to the scene.

On Wednesday, the council voted to reject a proposal by Sawant to remove funding for Shotspotter from the budget and use the $1.5 million to fund behavioral health care at non-congregate shelters, foreshadowing next week’s overall budget vote. (Since Harrell’s budget includes Shotspotter by default, the council does not have to take a separate vote to fund the program.) Mosqueda did manage to add an amendment requiring a separate racial equity analysis for each new location where the city deploys the system; one frequent criticism of Shotspotter is that it leads to overpolicing in communities of color while doing nothing to reduce gun violence in those communities.

Shotspotter has been around for decades, so there’s a large body of evidence suggesting it doesn’t work to address gun violence and consumes scarce police resources by repeatedly sending police out on false alarms. According to a recent report by the Chicago inspector general, more than 90 percent of Shotspotter calls that resulted in a police response turned out to be false alarms; that city is joining several others, including New Orleans and Portland, in ending or canceling Shotspotter contracts.

• As we noted above, the council plans to put off a formal tax discussion until after the budget passes in late November, but we’ll have a separate update on the revenue discussion well before then, so stay tuned. Today, the council discussed Pedersen’s proposal to eliminate the utility tax and fill the $38 million gap by passing a 2 percent local tax on capital gains; skeptics of Pedersen’s proposal argued that the city needs more funding to fill the looming budget deficit, not a revenue-neutral tax swap. And council staff revealed that one of the potential taxes identified by the city’s progressive revenue task force—a “surtax” on JumpStart for very large companies whose CEOs make hundreds of times more than their median employee—would only net a relatively paltry sum of $2 million to $4 million a year.