Category: Equity

Judge Strikes Homelessness Charter Amendment from Ballot; King County Equity Now Gets New City Contract

1. Late Friday afternoon, King County Superior Court Judge Christine Shaffer struck Charter Amendment 29, the “Compassion Seattle” homelessness initiative, from the November ballot, agreeing with opponents of the measure that it went beyond the scope of the initiative process. Specifically, Shaffer said, the amendment attempted to overrule the city of Seattle’s authority to determine its own homelessness and land-use policies—authority granted to local jurisdictions by the state legislature that cannot, she said, be overturned by an initiative at the local level.

The amendment, if adopted, would require the city council to spend a minimum of 12 percent of its general fund revenues on homelessness, dictating further that in the first year, that money would have to pay for 2,000 new units of “emergency housing” (shelter). It would also change local land use and zoning laws by requiring the city to waive code requirements, regulations, and fees to “urgently site” the projects it would mandate.

The groups that sued to remove the proposal from the ballot, including the Seattle/King County Coalition on Homelessness and the ACLU of Washington, argued that the voters of Seattle lack the authority to overturn these sort of legislative decisions, and that the amendment would effectively undo the agreement the city and county made to create the new King County Regional Homelessness Authority. Judge Shaffer agreed.

“There’s a direct effort in Charter Amendment 29 to control the city’s budgetary authority and that is not disputed in this record, any more than the efforts to control zoning and land use is disputed,” Shaffer said. “These are measures specifically required by Charter Amendment 29, and they both are outside the scope of a proper initiative in a way that is not even close. There are so many prior Supreme Court cases on both those topics.”

In arguing for the amendment, Compassion Seattle’s attorney Tom Ahearne said the court should let the proposal move forward and give opponents a chance to challenge it if and when it’s adopted. “When thousands of voters have signed a petition, opponents should not be able to hold the people’s measure hostage, merely because it opposes the policy or raises questions about the measure’s validity,” he said. “Instead of rushing to suppress the vote, this court should allow citizens to consider this charter amendment in November, and if citizens adopt it, allow the plaintiffs’ claims to be fully litigated and resolved through the trial court and appellate process.”

Judge Shaffer said she personally liked the solutions proposed in the amendment, and might vote for it if it was on the ballot. “But as judge,” she continued, “it cannot stand, and I am required to strike it from the ballot.”

“Judge Shaffer’s ruling affirms well-established limits to the local initiative process and recognizes the importance of the proper functioning of our democratic systems,” ACLU of Washington staff attorney Breanne Schuster said in a statement. “We are pleased that CA 29 will not stand as an impediment to solutions that meaningfully address our housing crisis and do not punish people for trying to meet their basic life-sustaining needs like shelter, sleep, and food.”

In a statement issued after the ruling, the Compassion Seattle campaign said that while they were “gratified that Judge Shaffer said that she would have voted for Charter Amendment 29 if given that option, we strongly disagree with her ruling today denying Seattle voters the opportunity to have their voices heard on the number one issue facing our city.” Because an appeal could not play out before the November election, the campaign continued, “We can still make our voices heard in the elections for Mayor, City Council, and City Attorney. In each race, the difference between the candidates is defined by who supports what the Charter Amendment was attempting to accomplish and who does not.”

2. Last month, Seattle Mayor Jenny Durkan and the city’s Human Services Department (HSD) announced that 33 community organizations would share the $10.4 million set aside to invest in “community safety capacity building,” one of many simultaneous efforts to support non-law enforcement approaches to public safety sparked by last summer’s protests.

One of the groups that will receive funds is King County Equity Now (KCEN), the coalition-turned-nonprofit that led the push for a city-wide participatory budgeting program—and, when the council supported their plan, took the reins of the Black Brilliance Research Project, intended to lay the foundations for public-safety-focused participatory budgeting in Seattle. KCEN’s brief tenure as a city sub-contractor ended ignominiously when the project’s head researchers left the organization because of alleged financial mismanagement, as well as alleged mistreatment of queer researchers and researchers born outside Seattle. The group lost their city subcontract, and the research project finished weeks later without KCEN.

But after several months out of the spotlight, KCEN is making its quiet return to the world of city contracting. With the new grant, KCEN says it will partner with “incredible local Black-led housing service providers, like First Place Schools [a charter school provider] and Monica’s Place,” a housing development in the Central District, to conduct another research project. KCEN initially asked for $789,391; however, HSD capped grants at $585,410 because of the volume of applications. The group will have a new fiscal sponsor—Parents for Student Success, a nonprofit cofounded by King County Equity Now board chair Dawn Mason.

This second project will include “an inventory of Black community resources, hubs, places to tap in, needs, current and potential Black partnerships, current policies successes, failures, and gaps to address anti-gentrification and spatial community toward building holistic support,” according to KCEN’s response to the city’s request for proposals. The core question that would guide KCEN’s proposed research—”what does community safety and wellness look like for you in place?”—is nearly identical to the central question of the Black Brilliance Research Project. The results of the research, they wrote in their proposal, would help them and their partners create “scalable, replicable anti-gentrification models.”

The organization asked for funds to pay existing staff, to hire more people to work on the new research project, and to pay for consultants, office space, and supplies.

Since the organization’s unwilling exit from the Black Brilliance Research Project, KCEN has focused on anti-gentrification projects; the group is an offshoot of the Africatown Community Land Trust, which focuses largely on land acquisition in the Central District.

During the Black Brilliance Research Project, measuring the success of multiple wide-ranging research teams became a key challenge for KCEN. In their latest grant application, KCEN says they will track their project’s success by assessing the number and “effectiveness” of their community meetings and workshops, the “thoroughness” of their partnerships and the “quality and reach of community-led research,” among other metrics.

Fizz: SPD Asks to Spend $15 Million in Salary Savings; Council Okays Durkan’s Equitable Communities Contracts

1. The Seattle City Council’s public safety committee heard a presentation on Tuesday morning outlining SPD’s proposals for spending more than $15 million in unspent salaries—a byproduct of skyrocketing attrition within the department, including 100 departures in the first six months of 2021 alone.

There are currently two pots of unspent money in SPD’s budget. Last November, the council passed a series of provisos preventing the department from spending roughly $9 million until SPD complied with some of the council’s reform goals; one of those provisos specifically captured $5 million of any salary savings SPD incurred as officers left the department in droves. But the department’s staffing woes have escalated, leaving the department with far more unspent salary dollars than anticipated—more than $10 million of which isn’t captured by the council’s provisos.

According to SPD budget director Angela Socci, the department needs to keep those savings to handle internal crises that arose over the past year—a proposal that counts on the council lifting provisos, and one that wouldn’t allow the council to redirect most the savings to newer, non-police public safety programs. In fact, SPD has already started using some of the $15 million to cover separation costs for departing officers, as well as to pay officers overtime to fill in gaps in patrol shifts. The department also began spending money on consultants, including a contract with the National Institute for Criminal Justice Reform that determined the city could eventually shift half of SPD’s current emergency call load to other responders.

The department’s decision to spend salary savings without the go-ahead of the council raised some eyebrows Tuesday. “Is it an accepted budget practice to move forward on spending in areas that the council hasn’t authorized yet,” asked councilmember Lisa Herbold, who chairs the committee.

According to council central staffer Greg Doss, who led the presentation, SPD is allowed to shift dollars in its personnel budget around as needed—from salaries to separation pay, for instance.

But SPD presented a much broader array of spending proposals that will need support from the council and mayor’s office, including a vote from the council to lift provisos on the department’s budget. The requests include $1.5 million to hire new civilian staffers, including community service officers and public disclosure staff, as well as $520,000 for “hiring and retention incentives”; in total, the department’s proposed spending would use $13.7 million of the salary savings. A much smaller portion—only $1.5 million—would shift out of SPD’s budget to fund programs like the “Triage One” civilian response teams proposed by Mayor Jenny Durkan last month.

Council President Lorena González pressured SPD strategy director Chris Fisher to outline a plan for stemming the tide of officers leaving the department. “I think these numbers tell the story,” she said, “that SPD management have significant room for improvement for retaining the new officers and existing officers.”

Fisher responded that the solution to SPD’s attrition problems may lay outside of the department itself. “Many officers say that money helps, but if it were just about the paycheck, they could do something else that would make just as much with a lot less time away from family,” he told the committee. “They want to know that people are invested in the department, and that they are appreciated.”

But councilmember Teresa Mosqueda offered a more optimistic view of the situation, saying the council  “could create a chart that pairs a downward trend [in police staffing] with an upward trend in spending on community safety”—a goal, she said, that the council shouldn’t lose track of.

2. On Wednesday morning, Seattle Mayor Jenny Durkan signed legislation releasing $30 million from the city’s general fund to spend on racial justice-related programs recommended by the Equitable Communities Initiative Task Force—a group assembled by her office last October that included representatives from an array of prominent local BIPOC community organizations.

“There was talk that certain groups were being pitted against each other,” said councilmember Deborah Juarez, who also served as a member of the task force. “Guess what? That didn’t happen.”

The city council voted unanimously on Monday to lift a proviso on the $30 million, raising no objections to the plan laid out by the task force earlier this summer. The proposed investments include nearly $9 million to be spent on affordable housing and land ownership program for Seattle’s BIPOC residents, as well as $7.5 million to provide capital and technical support to BIPOC-owned small businesses.

In earlier discussions of the plan, some councilmembers raised questions about the potential for overhead costs to consume an outsized proportion of the $30 million. Chris Lampkin, a task force member and political director with SEIU 1199NW, told the council’s finance meeting on July 20 that “most of the funding recommendations are intended to channel money directly to community through existing programs, as opposed to spending money to stand up new programs.”

The task force, which began as follow-up to Durkan’s ambitious promise last summer to invest $100 million in BIPOC communities, faced early public opposition from some activists, who argued that the group would butt heads with the council’s own participatory budgeting plan. The Seattle City Council also cut the project’s budget from $100 million to $30 million, directing the rest to the participatory budgeting process and other priorities that predated Durkan’s proposal.

But the council’s brief discussion on Monday suggested that most of the anticipated tensions surrounding the task force dissipated over the past half-year. “There was talk that certain groups were being pitted against each other,” said councilmember Deborah Juarez, who also served as a member of the task force. “Guess what? That didn’t happen.”

Federal Judge Doesn’t See Path Yet Toward Ending Consent Decree

By Paul Kiefer

For the first time since the pandemic began more than a year ago, representatives from the US Department of Justice, Seattle City Attorney Pete Holmes, and other police oversight figures gathered for a status update on Seattle’s consent decree—a nearly decade-old agreement empowering the DOJ to oversee police reform in Seattle.

Though the city has spent years re-working Seattle Police Department policies and training to satisfy several of the court’s key expectations including reductions in the use of deadly force by police officers, Seattle’s progress slipped in the past three years—in part because of a widely-criticized 2018 Seattle Police Officers’ Guild (SPOG) that undercut landmark improvements to the city’s police oversight system. That reversal on reforms, along with the SPD’s heavy-handed response to last Summer’s Black Lives Matter protests, raises the prospect that Seattle will remain under the consent decree for much longer than expected.

Federal District Court Judge James Robart, who has overseen the consent decree since its conception in 2012, is grappling with two key questions as he tries to determine the path forward: First, whether the city and police department has successfully re-implemented police oversight reforms that the (SPOG) contract wiped out; and second, whether SPD’s response to massive citywide protests in 2020 will set back the city’s progress towards ending the consent decree.

Tuesday’s hearing at the US District Courthouse in downtown Seattle did not provide Robart with clear answers on either front. While making a case that the city has made progress towards meeting the court’s demands, City Attorney Pete Holmes pointed to some notable accountability victories in the past three years. Unfortunately, he offered no promises that the upcoming SPOG contract negotiations won’t upend the city’s commitment to accountability. Meanwhile, Dr. Antonio Oftelie, the court-appointed consent decree monitor who acts as Robart’s eyes and ears on police oversight, told the judge that his team is still reviewing last summer’s SPD response to protests; they won’t decide whether SPD’s actions during the Black Lives Matter protests put the city out of alignment with the consent decree until the end of 2021, he said.

The hearing came at a critical point for the future of the consent decree. In its tenth year, a growing number of community activists argue that the consent decree has become an obstacle to efforts to downsize SPD and invest in alternatives to traditional policing. But an array of unknown variables—including the next contract with SPOG, which the city will likely begin negotiating in the next six months—raise the possibility that the consent decree could end up shaping Seattle’s police reform efforts for years to come. “This was supposed to be a five-year gig,” Judge Robart quipped; instead, come January, Seattle will inaugurate its fifth mayor since the consent decree began.

“My role is to tell you when you don’t get things right,” he said, “not how to do things.” —Federal District Court Judge James Robart

During Tuesday’s hearing, Robart took time to criticize the Community Police Commission (CPC), a civilian group that acts as a quasi-think tank on police accountability, for filing a request on July 27 to direct Oftelie’s monitoring team to take a more active role in SPD accountability, including in negotiations with police unions. Edgar Sargent, an attorney representing the CPC, told Robart that union negotiations are really just “a black box,” and suggested the monitoring team should be privy to union contract negotiations and provide progress updates directly to the court.

Continue reading “Federal Judge Doesn’t See Path Yet Toward Ending Consent Decree”

It’s Time for a Biden-Era Mandatory Housing Affordability Plan

by Josh Feit

The report is out. Mandatory Housing Affordability: Fail.

With such solid results, how can I say that?

It’s true, the numbers are impressive. MHA dollars accounted for 45 percent of the city’s affordable housing spending in 2020, or $52.3 million. (MHA actually brought in $68.3 million total last year, and the city will carry over the additional $16 million in MHA money for 2021 affordable housing projects.)

And while the longtime Seattle Housing Levy’s $56.7 million accounted for more of 2020’s affordable housing spending, 48 percent, MHA actually created 110 more rent-restricted units than the venerated levy—698 funded by MHA versus 588 funded by the levy.

In short, this brand-new inclusionary housing mechanism, which came online in 2019 after five years of old-school neighborhood lawsuits and challenges, more than matched the levy, a 40-year-old property tax program that cost homeowners a median of $122 a year in 2016.

MHA is an affordable housing mandate that upzoned a sliver of Seattle’s exclusive single-family areas while requiring developers to either pay a fee, which goes into an affordable housing fund, or build a percentage of affordable units on site. MHA applies to every new multifamily or commercial building in the city. And it costs you nothing. Oh, and the $52.3 million for 698 units doesn’t even include the 104 on-site affordable housing units that MHA created; the city does not track on-site units as affordable housing dollars.

So, with such glowing stats, why “fail?”

I mean it the same way Obama’s $800 billion stimulus package was a failure and Democrats are now applauding Biden for going big on his $4.1 trillion infrastructure plan. In other words, if we’re getting a nearly-$70 million-a-year bang for our buck on affordable housing dollars from the polite MHA upzones the council passed in 2019, it’s time to do a Biden and go bigger.

If a bumper-bowling upzone was able to create a fund comparable to the Housing Levy without raising any taxes, imagine what a grown-up upzone would do for affordable housing.

MHA only upzoned 6 percent of the city’s single-family zones, which make up around 65 percent of the city’s developable land. Under MHA, the city also did some earlier upzones between 2017 and 2019 in parts of six  neighborhoods where some density was already allowed, such as downtown, the University District, South Lake Union, and 23rd Avenue in the Central District

Back when the council passed the final pieces of MHA two years ago, the city’s two at-large council members, Lorena González and Teresa Mosqueda, were already playing Elizabeth Warren to the mayor’s Larry Summers. Caving to pressure from the slow-growth Seattle Times, former mayor Ed Murray scrapped his initial MHA upzone proposal, which would have raised the ceiling on height regulations in single family zones at large.

“For some, this housing affordability legislation goes too far,” González said from the council dais when the council passed MHA in March 2019, “for others it does not go far enough.” It was clear which side González was on. “So, let’s chat a little bit about that dynamic,” she said. “Contrary to the name of the Select Committee on Citywide MHA, this legislation is not even close to citywide. This legislation impacts a total of only 6 percent of existing areas currently and strictly zoned as single family home zones. That means even with the passage of MHA legislation, approximately 60 percent of the city of Seattle is still under the cloud of exclusionary zoning laws.” She went on to give a history lesson of racist housing covenants in Seattle.

Councilmember Mosqueda sounded the same note. “I’m sad that we’re not actually having a conversation about citywide changes,” she said. “I think that’s the next conversation to have. Larger changes that create a more inclusive Seattle. Again, this is just an effort to look at 6 percent of the single family zoning in our city.”

González is running for mayor this year, and Mosqueda is backing her. Here’s hoping González is actually committed to doing something about “the cloud of exclusionary zoning.” Not only because it will help create a more inclusive city, but according to the numbers, it would be good affordable housing policy.

Think about it. If a bumper-bowling upzone was able to create a fund comparable to the Housing Levy without raising any taxes, imagine what a grown-up upzone would do for affordable housing. While we created 1,300 units last year, we should be building a total of 244,000 net new affordable homes by 2040, according to the King County’s Regional Affordable Housing Task Force, or about 12,000 a year.

Another important stat, one that’s not in the report: $10 million of all MHA proceeds to date have come from developments within the sliver of city land that used to be zoned exclusively single-family.

Upzoning the rest of the city—the part that remains exclusively single-family—would certainly help. Another important stat, one that’s not in the report: $10 million of all MHA proceeds to date have come from developments within the sliver of city land that used to be zoned exclusively single-family.

This is noteworthy. Here’s why. There are three main streams of MHA money: first, payments from developments in selected multifamily hubs that became subject to MHA in 2017, including parts of 23rd Ave. in the Central District, the University District, and Uptown; next, payments from developments in all multifamily zones, from the new MHA legislation that took effect in 2019; and also payments from developments in the upzoned sliver of former single-family zones.

Over the four years between 2016 and 2020, the hub upzones, which went into effect earlier, have generated about 60 percent of the money from MHA, most of that in 2020. But since 2019, when MHA dollars started flowing in from the multifamily areas and the former single-family areas, nearly a third of the additional money from those new revenue sources—$10 million of $36 million remaining total—has been from development in the sliver that used to be single-family.

That outsized stat indicates just how attractive these formerly verboten zones, which sit on the edges of existing urban centers and urban villages, are for new housing. If we actually upzoned all of the city’s exclusive single-family areas, instead of just six percent, we’d have a better chance at generating the money to build the affordable housing stock this city needs.

While the upzoned former single-family zones did generate $10 million for affordable housing, there is another MHA fail. None of the on-site MHA housing was built in those areas. That needs to change. Opening up the entire city to multifamily housing, as opposed to the begrudging 6 percent allotted in MHA, would create more options for on-site multifamily development in these zones themselves. Hopefully, the next conversation about upzones will address how to actually put multifamily housing in amenity-rich SFZs.

The name of this column is Maybe Metropolis. My verdict on MHA?  Emphasis remains on “maybe” until we do mandatory housing affordability right and make it actually citywide.

Josh@PubliCola.com

Community Groups Support Equitable Development Staffers; Sidran Opposes “Compassion Seattle”

1. Members of Seattle’s Equitable Development Initiative board, along with dozens of community organizations, signed a letter of support for two EDI leaders at the city’s Office of Community Planning and Development who wrote a scathing letter late month accusing Mayor Jenny Durkan and OCPD of emotionally abusing EDI staff while sowing division among the communities EDI is supposed to support.

“As community stakeholders and EDI Board members, we… have witnessed the emotional labor required of EDI staff, valued for their deep ties to community, but directed to lead this program in a way that has perpetuated inequities for those it purports to serve,” the letter of support says. “The City of Seattle, OPCD, and the EDI must do better by BIPOC staff and community organizations.”

EDI manager Ubax Gardheere and EDI strategist Boting Zhang wrote an open letter last week saying they were taking a “mental health break” from the city. “Our bodies have been weaponized in an institution that historically and presently has actively fought against you, and you have sensed this,” they wrote.

The Equitable Development Initiative began in 2015 under then-mayor Ed Murray as a revolving fund intended to advance community-led projects in areas of the city with a high risk of displacement and low access to opportunity. None of four demonstration projects that were chosen to launch the initiative have been built.

By saying “it is city policy” to avoid dispersing people unless they’re impeding the use of public spaces, the former city attorney argues, the amendment will make it impossible for the city to sweep anyone, including, potentially, someone who is “blocking traffic by pitching a tent in the middle of 5th Ave. downtown.”

During last year’s budget process, Durkan proposed eliminating a long-promised $30 million fund to pay for EDI projects out of the proceeds of the Mercer Megablock sale, citing the pandemic; the council restored the funds, but EDI proponents saw Durkan’s willingness to defund the initiative as a betrayal.

Since then, the mayor has appointed her own Equitable Communities task force to recommend spending priorities for $100 million in investments in BIPOC communities, which includes the $30 million; some advocates have criticized the makeup of the task force, saying it is composed largely of Durkan allies and groups that are seeking a slice of the money.

“When she set up the task force, a lot of people didn’t want to join,” Yordanos Teferi, of the Multicultural Community Center, recalled. “And then we learned that those who did join the task force were not coming into the process trying to advocate for communities at large—they were just advocating for their own projects or their own organizations.” The MCC, along with Africatown, the Ethiopian Community in Seattle, Puget Sound Sage, Friends of Little Saigon, and more than two dozen other groups, signed the letter of support.

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2. Former Seattle city attorney Mark Sidran—best known for defending the Teen Dance Ordinance, impounding people’s cars over expired driver’s licenses, and, oh yeah, supporting a zillion laws aimed at criminalizing homelessness—opposes the Compassion Seattle Charter initiative. Continue reading “Community Groups Support Equitable Development Staffers; Sidran Opposes “Compassion Seattle””

Tax Opponents File Lawsuit Against Capital Gains Tax. Democratic State Senator Says Bring it On

Youtube screenshot.

by Leo Brine

On Wednesday, a conservative think tank, the Freedom Foundation, filed a lawsuit against the hot-off-the-presses capital gains tax (SB 5096) and another conservative group announced they plan to do so as well.

In response, Democratic state Sen. Jamie Pedersen (D-43, Seattle) told PubliCola later Wednesday evening: Bring it on. Lawsuits are “great,” said Pedersen, who chairs the Law and Justice committee, because he sees them as a way to challenge old, anti-tax state supreme court rulings.

During this year’s legislative session, as the Democrats moved the capital gains tax bill through the legislature, Republicans decried it as an unconstitutional income tax. This is now the legal argument against the bill, which Governor Jay Inslee has not yet signed into law.

If the modern-day supreme court was to determine that income is not property, Sen. Pedersen said, it “would change the world for us in Olympia about what’s possible.”

The capital gains tax, which Democrats passed on the last day of this year’s legislative session on a 25-24 vote, with three moderate Democrats and every Republican voting no, imposes a 7 percent tax on financial gains from the sale of intangible financial assets, such as stocks and bonds, above $250,000. About 7,000 Washington taxpayers would pay the tax beginning in 2023.

The Freedom Foundation filed its lawsuit in Douglas County on behalf of seven state residents who would pay the tax. The group claims that capital gains constitute income, making the tax an income tax. In 1933, the state supreme court ruled that income is property subject to the uniformity clause in the state constitution, which says that different types of property—such as income below and above a certain threshold—can’t be taxed at different rates. This ruling has been the basis of claims that an income tax is unconstitutional for nearly a century.

Democrats say the capital gains tax is an excise tax because it’s the sale of assets that triggers the tax rather than the income that the sale generates.

Conservatives don’t buy it. “Capital gains are clearly income. And when you tax them, it’s an income tax — no matter what you choose to call it,” Freedom Foundation CEO Aaron With said in a press release. Continue reading “Tax Opponents File Lawsuit Against Capital Gains Tax. Democratic State Senator Says Bring it On”

House Passes Capital Gains Tax with Rep. Frame’s Key Amendment

by Leo Brine

After a month of deliberations, the House finally passed capital gains tax legislation (SB 5096), including a pivotal amendment proposed by Finance Committee Chair Rep. Noel Frame (D-36, Seattle) that restored protections against a referendum—a public vote to invalidate a bill before it takes effect. Senators removed those provisions when they voted on the original bill in March. The bill now includes two sections that protect it from voter referendum; however, it no longer contains an emergency clause that would have caused the bill to go into effect right away.

Republicans say the capital gains tax is unconstitutional and want to make sure it stays vulnerable to a referendum, which is their safest option for defeating the tax. But the new language puts their hopes in jeopardy. Republicans proposed 19 amendments attempting to remove the protections, dragging the debate from Tuesday evening to Wednesday afternoon.

Even with the protections against referendum in the bill, the tax could still be vulnerable to a voter initiative—which Frame noted are a far more common way to challenge tax policy than referenda. An initiative is a way to repeal legislation, whereas a referendum cancels the legislation before it becomes law. For someone to propose an initiative, they would need to gather a number of signatures equal to 8 percent of the votes cast in the last gubernatorial election. That’s about 324,516 signatures. A referendum only requires half that number.

The capital gains tax imposes a 7 percent tax on financial gains from intangible financial assets, such as stocks and bonds, above $250,000. Frame said the bill will fix Washington’s upside-down tax code by making wealthy residents pay their fair share. Roughly 7,000 Washington taxpayers would pay the tax beginning in 2023.

Frame’s revised version of the bill says the tax “is necessary for the support of the state government and its existing institutions.” Under Article 2 of the state Constitution, this language protects the bill from a voter referendum.

House Finance Committee chair Rep. Frame’s revised version of the bill says the tax “is necessary for the support of the state government and its existing institutions.”

Frame said she added the section clarifying the necessity of the tax because “this is an important function of government that needs to be paid for. I think we’re pointing out that’s what we believe this is.”

When the House was debating the bill Tuesday night, Republicans proposed multiple amendments to remove the protective language. Some amendments they proposed struck the “necessary” section altogether. Others added new sections specifying there was no emergency clause in the bill. Rep. Ed Orcutt (R-20, Kalama) even proposed an amendment that would required the Secretary of State to place a referendum on the bill on the next state general election ballot. All of the amendments failed, but it was clear from the final tallies that some Democrats voted for them.

Frame also added a second, subtler protection against referendum to the bill. The revised bill would direct tax revenue into the Education Legacy Trust Account (ELTA) which helps fund public schools and childcare services in the state. Because the State uses the account to fulfill its obligation to fund public schools, the tax would be necessary to support government and its existing institutions, Frame said.

Frame defended the language in her revised bill, saying during the debate Tuesday night, “we have a paramount duty to invest in K-12 education and early learning and childcare, and this capital gains excise tax is intended to pay for that. That’s it.” Frame said the judiciary branch should determine whether or not there is an emergency clause in the bill, not the legislature.

“It’s not the language that matters, it’s where we’re making our investments—that’s what matters,” Frame said after the House passed her revised bill. “We believe the investments made in this bill are for the ongoing function of government. That’s what the lawyers will look at.”

Republicans tried passing amendments to direct the funds into accounts that do not support state institutions, but their efforts failed.

The House passed Frame’s bill 53-45 and sent it to the Senate.

Senate Majority Leader, Andy Billig (D-2, Spokane) said Wednesday that Senate Democrats would caucus to see if they had the votes to pass the House’s updated bill without making any changes. Otherwise, senators could propose amendments to strip the bill of its protective language. Senators from both sides of the aisle voted for Sen. Steve Hobbs’ (D-44, Everett) original amendment that got rid of the original bill’s emergency clause.

If the Senate passes the bill with the protective language intact, Republicans options to block the bill would be narrowed to filing a lawsuit or hoping for a voter initiative. Senate Republican Leader, John Braun (R-20, Centralia) said during a press conference on Wednesday, senate republicans will work to get rid of the protective. language in the bill. “The idea of limiting people’s right to a referendum is wrong,” Braun said.

Transit Advocates Push for Bigger Multimodal Investment from State

by Leo Brine

Transit advocates tolerated the House and Senate’s transportation committees’ underwhelming 2021-23 biennium budget announcement last month believing that legislators were cueing up a more multimodal approach in the pending transportation package. (The previous budget announcement was about funding earlier commitments made by previous legislative sessions.) However, the House Transportation committee unveiled an all-new 16-year transportation package (HB 1564) on Thursday that, once again, provides large sums of funding for highway expansion projects and road and highway maintenance while shortchanging transit.

Troubled by how few dollars the House allocated for multimodal and green initiatives when compared to the highway-related initiatives, advocates are now hoping for big changes before Democrats move the package to Governor Inslee’s desk.

The new transportation package, dubbed “Miles Ahead Washington,” allocates a total of $22.3 billion to funding transportation initiatives. Seventy percent of the funds ($15.7 billion) go to “highway-related initiatives,” including $6.1 billion for highway expansion projects and $4.6 billion for maintenance and repairs over the next 16 years. Meanwhile, the House allocates about 25 percent of the package, $5.5 billion, to multimodal projects, including investments in multimodal transport, bicycle and pedestrian improvements, safe routes to schools, and rural mobility transit grants.

Mobility rights activists say the new proposal is too similar to past transportation packages, with similar funding shortfalls. “We can’t support it because there’s not enough investment in transit service and in sidewalks and other kinds of pedestrian access,” Anna Zivarts, director of the Disability Mobility Initiative Program at Disability Rights Washington (DRW) said. “It makes it hard to get excited about something that we see as just so far from the unmet needs.”

Continue reading “Transit Advocates Push for Bigger Multimodal Investment from State”

Olympia Fizz: House Committee Passes Wealth Tax, House and Senate Take Action on Tenant Rights and Funding

1. After nearly two months of inaction, the House Finance committee passed the progressive wealth tax (HB 1406) out of committee Wednesday morning. The bill made it out of committee with no amendments, despite Republican efforts.

The wealth tax is arguably the most progressive piece of tax reform legislation this session; the House is taking the lead, while the Senate took the lead on the capital gains tax.

The wealth tax legislation would require anyone with more than $1 billion in intangible financial assets, such as stocks, bonds, or cash, to pay a one percent tax on their worldwide cumulative wealth. The Department of Revenue estimates the tax will affect 100 Washington state taxpayers and generate $5 billion per biennium.

Finance committee chair Rep. Noel Frame (D-36, Seattle) urged her colleagues to vote yes on the bill so the state could begin rebalancing Washington’s tax system, which, according to the progressive Institute on Taxation and Economic Policy, forces the lowest income Washingtonians to spend 18 percent of their income on taxes while the very wealthiest spend just 3 percent of their income on taxes.

“The Washington state wealth tax would take a giant step forward in trying to right that wrong by asking the wealthiest Washingtonians, including some of the wealthiest people in the world, to pay their fair share,” Rep. Frame said.

Members of the finance committee passed the bill 9-7 with Democratic senators April Berg (D-44, Mill Creek) and Larry Springer (D-45, Kirkland) along with all Republican committee members, voting no. PubliCola has reached out to both Berg and Springer for comment.

Patinkin Research Strategies found that 58 percent of Washingtonians support the tax and just 32 percent are opposed. (The pollster gets a B/C rating from 538.)

According to Frame, the legislature will direct revenue from the wealth tax into a dedicated Tax Justice and Equity fund, rather than into the state’s general fund as the bill originally specified. Legislators will use the Tax Justice and Equity fund to support an anti-displacement property tax exemption (HB 1494) that the finance committee also passed Wednesday.

The finance committee passed the wealth tax in their last regularly scheduled meeting of the session. April 2 will be the last day for finance bills to be read into the record on the house floor, leaving little time for the bill to be deliberated on in the Rules committee, which will take up the bill next. If Rules passes it out, the bill will go to the House floor where progressives hope to send it to the Senate.

2. The Legislature’s latest biennial budget proposals made two traditional foes, tenants and landlords, happy—with some footnotes.

In budgets released this week, legislators from the House and Senate allocated roughly $1 billion to new rental assistance and eviction protection programs. (The House allocates $1 billion, the Senate $850 million). The state will use the money to pay off rent debt accrued by tenants during the statewide eviction moratorium and fund legal counsel in eviction cases.

Continue reading “Olympia Fizz: House Committee Passes Wealth Tax, House and Senate Take Action on Tenant Rights and Funding”

State Transportation Budgets Reflect Bygone Era

 

by Leo Brine

The House and Senate Transportation committees unveiled their transportation budgets (HB 1135, SB 5165) for the 2021-23 biennium Tuesday. Or, more accurately, they unveiled the state’s incorrigible commitment to highway and road expansion. Climate and transit activists hope this is the last budget of a bygone era. While they are unsurprised that the two budgets continue prioritizing road expansions, advocates say the transportation revenue packages expected next week must move away from putting more cement on the ground and move the state’s transportation infrastructure toward sustainability, equity, and climate action.

Tuesday’s Senate and House transportation budgets will each follow the typical process: committee votes, floor votes, and then switching houses. Legislators from both houses will then decide which bill moves forward and will hammer out details in a conference committee.

The Senate’s proposed transportation budget allocates $11.7 billion for various transportation projects and the House allocates $10.7 billion. Both direct money to projects—mostly highway expansions—that were a part of 2015’s transportation package, Connecting Washington.

Funding allocated to construction projects dwarfs funding for expansion of public transit access and green initiatives. For example, the House proposal allocates $453 million to widen I-405 between Renton and Bellevue and more than half a billion to the Puget Sound Gateway project, a massive highway expansion and extension megaproject in Pierce County.

The Senate bill would cut $260 million from the multimodal transportation account to fund Connect Washington and ferry maintenance. The House’s cut to the multimodal account is not as dramatic as the Senate’s—just $50 million, to fund ferry maintenance.

“I think the bigger story is that this budget represents big decisions made in the past. As the legislature continues debating the next transportation package, we need to make sure that it’s oriented toward a sustainable and equitable future.”—Kelsey Mesher, advocacy director, Transportation Choices Coalition

“I think the bigger story is that this budget represents big decisions made in the past,” said Kelsey Mesher, advocacy director at the Transportation Choices Coalition. “As the legislature continues debating the next transportation package, we need to make sure that it’s oriented toward a sustainable and equitable future. And that will look really different, and that will focus on transit, access to transit, maintaining the system we already have, and mitigating harm.”

During the public hearing on the Senate transportation budget, Senate Transportation Chair Steve Hobbs (D-44, Issaquah) groused: “It wasn’t easy last year. Last year sucked, too. This year double sucked.” Hobbs said the priorities of the Transportation committee are “keeping the lights on” by maintaining roads and bridges, keeping ferries and buses operating and finishing Connecting Washington projects.

The transportation budgets are supported by the state’s gas tax, as well as state bonds and, this year, aid from federal pandemic relief funds, the American Rescue Plan Act. Washington’s gas consumption dropped during the pandemic and with it went a good chunk of revenue for the transportation budget. State projections show revenue for the 2019-21 biennium declining by $669 million, roughly 10 percent, and another $454 million in the 2021-23 biennium, about 6.5 percent. Over the next 10 years, transportation revenue is expected to decline by $1.9 billion. The state estimates it will be 10 years before gas consumption rates are back to their pre-pandemic levels.

Anna Zivarts, the director of disability and mobility initiatives at Disability Rights Washington, said the gas tax that props up the transportation budget is regressive. “We all know that the gas tax is at some point going to be an obsolete revenue stream,” she said. “The folks who can afford electric vehicles and not [have to] pay the gas tax are wealthier. And with the cost of living in a lot of communities being high, the people who have to commute further are lower-income” and are spending more on gas, thus contributing more to the system. Zivarts said while the tax is regressive, the state should use gas tax revenues to make the state’s transit infrastructure more equitable and environmentally sustainable.

Continue reading “State Transportation Budgets Reflect Bygone Era”