State legislation requested by Attorney General Bob Ferguson would fully exempt newspapers and some online publications from the state business and occupation tax, saving eligible publications (and costing the state) a total of about $10 million over the next four years. The bill is sponsored by Sen. Mark Mullet (D-5, Issaquah) in the senate and Rep. Gerry Pollet (D-46, Seattle) in the house.
Newspapers already pay a reduced B&O tax rate, but online publications don’t count as newspapers (or publications, for that matter) under current state tax law. As a result, online outlets pay a higher tax rate than print newspapers like the Seattle Times; PubliCola, for example, pays the same B&O tax as any other “retailer,” even though our only product is free online content.
If the tax break for newspapers is allowed to elapse in 2024, as scheduled, their business and occupation taxes would increase around 40 percent—a significant hit for an industry that’s already struggling.
To prevent that, the legislation would exempt newspapers and “eligible digital publications”—those with at least two full-time employees, but no more than 50—from state B&O taxes through 2035.
In a committee hearing on the proposal Tuesday, Sen. Mullet said he’s found it alarming to watch the newspaper industry shrink over the years, but struck a note of caution about the impact of expanding the exemption too far.
“I think the attorney general, in their agency request, had a good idea to say, maybe we should think about how to get some of the electronic people in the preference as well,” Mullet said. “But I think it seems like based on the fiscal note, we have to work with [the state Department of Revenue] to kind of define that. We’re not trying to quadruple or quintuple the size of the preference here. We’re just trying to expand it to make sure it wasn’t just the traditional print papers but some of the other legitimate online newspaper publications as well.”
Most of the people who testified at Tuesday’s meeting were the publishers of small newspapers around the state, including the Mason County Journal, the Methow Valley News, and The Star newspaper from Grand Coulee Star.
Scott Hunter, the publisher of the Star, said that in the last 30 years, his paper has transformed from “a very robust newspaper” with multiple full-time reporters to a one-person operation in which Hunter does everything from photographing local basketball games to covering city council meetings, unpaid. “This bill… is not going to be a game changer for me,” Hunter said. “But it doesn’t make fundamental sense to tax something that you want to keep going, that is struggling, and is essential. It’s just fundamentally doesn’t make sense.”
PubliCola submitted testimony supporting the inclusion of small online publications in the bill, and asked legislators to eliminate the minimum publication size (two or more full-time employees) to reflect the fact that many small publications rely on freelancers rather than full-time staff reporters to fill their physical or virtual pages.
Next year, Seattle voters will be asked to approve a renewal of the city’s seven-year housing levy—a property tax that, since 1981, has constituted the city’s main source of funds for affordable housing. Although the Office of Housing is still hammering out the details, the proposal is certain to dwarf the current levy, more than doubling the size of the tax and almost tripling amount it will raise, from $290 million to $840 million a year. Under the latest draft, the owner of a median Seattle house would pay about $342 a year if the most recent version of the levy passed, compared to $114 today, an increase in real terms from 14 cents per $1,000 of assessed home value to 34 cents per $1,000.
What will Seattle voters get for all that money? The biggest-ticket item, at $640 million: About 2,600 new apartments, or about 200 more than the 2016 levy. Most of those units will be studios and one-bedrooms, although the final number, and mix of apartment sizes, could still change; an earlier version of the plan would have built fewer than 2,200 new homes.
Seattle’s Office of Housing is aware that number seems underwhelming, but says they have little choice but to ask voters to do less with more.
“Seattle’s affordable housing developers are contending with the same increased development costs as market-rate developers,” said OH spokeswoman Stephanie Velasco. “Simply put… it’s expensive to do any new development right now, due to inflation, high cost of land, and high cost of materials.”
Merely “meeting today’s need,” Councilmember Teresa Mosqueda said, would “mean we wouldn’t be planning for and building the housing needed for our growing population and the projected influx of residents in the near future.”
The revised levy proposal—an expansion of OH’s original, $758 million plan—would also maintain or expand funding for housing acquisition (buying up existing buildings, which both the city and King County did a lot more of during the pandemic), homeownership assistance, eviction prevention, and operations and maintenance (maintaining new buildings and providing supportive services and rent assistance to residents who need them).
“The Operating, Maintenance, and Services (OMS) program keeps the water running, the lights on, addresses regular repairs, provides maintenance and janitorial work, and supports operating and services personnel in Housing Levy-funded buildings,” Velasco said. “We have heard many times from affordable housing providers over the past year, particularly those providing permanent supportive housing, that these funds are critical to keeping their buildings running.”
One thing that has changed since the last levy renewal is that Seattle now has the JumpStart payroll tax, a tax on the wages of the highest earners at Seattle’s largest companies that passed in 2020. According to projections from OH, JumpStart is likely to produce between 1,600 and 2,200 new apartments over the life of the levy—a fact that could end up being a liability or an asset.
For those who reflexively oppose higher taxes—like, say, the Seattle Times editorial board—the existence of JumpStart could provide an argument against expanding the levy. “Say no to huge tax increase for housing,” the headline might read. “Time to go back to drawing board on bloated housing levy.”
City Councilmember Teresa Mosqueda, who proposed the JumpStart tax in 2020 and has defended it during two lean budget cycles, said the city “cannot look to JumpStart to supplant what the levy should pay for. [The tax] is intended to be additive to the housing levy base, which must still grow. [Merely] meeting today’s need,” Mosqueda added, would “mean we wouldn’t be planning for and building the housing needed for our growing population and the projected influx of residents in the near future.” Seattle continued to grow during the pandemic, and city planners anticipate our population will swell to 1 million in the next 20 years.
Mosqueda’s colleague, Councilmember Andrew Lewis, argues that the JumpStart tax could actually help the levy pass, by showing voters that the city has a plan to build enough housing to alleviate Seattle’s affordability crisis.
“For the first time ever, when you look at all these [housing] resources”—including the city’s Multifamily Housing Affordability (MHA) program and the state Housing Trust Fund, among others—“I think we’re pretty well positioned to be the jurisdiction on the West Coast that makes a real systematic impact on homelessness,” Lewis said. “What I would want to really look at is what role does the housing levy fill in the context of all of our funding streams that are going into housing, and how can we use the levy as tool to close gaps?”
“I take the rapid public shift to a stronger levy proposal as a hopeful sign the [Harrell] administration understands this is a legacy issue, and a great issue to embrace and champion.”—Alison Eisinger, Seattle/King County Coalition on Homelessness
Velasco, from OH, notes that while proceeds from the housing levy are basically steady—unless home values decline sharply, it will keep bringing in reliable revenues year after year—the JumpStart tax is more variable: Payroll tax revenues fluctuate based on the number of high-paying jobs in Seattle, and that number will ebb and flow over time as big employers like Amazon shed and gain staff. “Because of this, we consider the Housing Levy to be foundational to Seattle’s entire affordable housing ecosystem,” Velasco said. OH’s model shows the impact of JumpStart revenues ranging from $1.1 billion (the current 2023 projection) to $557 million (a 50 percent dropoff).
Some advocates have argued that the levy should be even larger, to build in long-term wage stability for housing provider staff, fund ongoing maintenance at buildings that already exist, and create more housing, especially larger, family-sized size units, which make up just 15 percent of the latest levy proposal.
Seattle/King County Coalition on Homelessness director Alison Eisinger said the success of the levy will depend on whether it will “stand the 2030 test. Will we look back in seven years and say: ‘Damned right! This city made the biggest housing difference possible’? … I take the rapid public shift to a stronger levy proposal as a hopeful sign the [Harrell] administration understands this is a legacy issue, and a great issue to embrace and champion.”
Source: Technical Advisory Committee presentation on Seattle Housing Levy
Housing Development Consortium director Patience Malaba—who, like Eisinger, testified in favor of a larger levy at a recent TAC meeting—said the levy still has “room to grow” before OH recommends a final proposal to Mayor Bruce Harrell. “Number one, we should invest in the buildings once we have created them. And number two, we do need to support the people who are working in those buildings” with fair wages, Malaba said. She sees $840 million as “a starting place”—one that should provide the basis for a larger levy that will build more housing and “really push the bounds of what’s possible.”
Historically, Seattle voters have approved the housing levy by increasingly wide margins—56 percent in 2022, 63 percent in 2009, and 70 percent in 2016. But the success of any tax increase depends on whether taxpayers believe the city is investing its tax dollars wisely, and the future campaign against the levy could capitalize on the widespread perception that the region continues to spend more money on homelessness and housing but the crisis isn’t getting better.
Polls, Lewis points out, have consistently showed that voters rank housing insecurity and homelessness among their top concerns—a sign, he said, that “it’s important that we have a plan to actually solve the problem. We have a tendency to get 80 percent there and then hold back a little because we’re worried about overreach. What I would like to do is create a plan and go to the people and say this is the comprehensive plan that the levy [is] a puzzle piece [in] attempting to solve.”
Velasco, from the city’s housing, declined to provide details about the latest iteration of the levy proposal, which the TAC will meet to discuss on December 16. Once OH has finalized its levy plan, it will go to Harrell’s office, and on to the city council, for approval or amendment before it heads to the ballot next year.
The Seattle City Council’s budget committee, which includes all nine council members, moved forward on a 2023-2024 budget yesterday that will move the city’s parking enforcement division back to the police department, preserve inflationary wage increases for human service workers, and increase the city’s funding for the King County Regional Homelessness Authority—all while closing a late-breaking budget hole of almost $80 million over the next two years.
Every fall, the mayor proposes a budget and the council “rebalances” it, adding spending for their own priorities and removing items to keep the budget balanced. In November, after many council members had already proposed substantial changes to Mayor Bruces Harrell’s initial budget proposal, the city received news that tax revenues would be even lower than previously anticipated. The biggest unanticipated shortfall came from a decline in real-estate taxes, which pay for long-term capital projects, but other revenues, including parking taxes and money from the sweetened beverage tax, also declined.
Last week, council budget chair Teresa Mosqueda proposed a balancing package that saved money by declining to fund most of the new programs and program expansions Harrell proposed in his budget, while making several substantive policy changes. Among the most controversial: A proposal to eliminate 80 vacant positions in the police department, and a related plan to to keep the city’s parking enforcement officers at the Seattle Department of Transportation (SDOT), rather than moving them back to SPD, while the city decides on a permanent home for the unit.
“Our mayor’s budget did not delete these 80 [vacant police] positions, and if we trust in what the mayor asks for regarding public safety and the budgeting knowledge and skills and best practices of the city budget office, I don’t think we should do anything different here.”—Councilmember Alex Pedersen
The budget the committee adopted Monday night, nearly 12 hours into a meeting that began at 9:30 that morning, will eliminate the 80 vacant positions, while preserving another 160 vacant positions in future years. Vacant positions continue to be funded year after year unless the mayor or council takes action to defund them temporarily and use the money for other purposes, as Harrell’s budget does this year. Both the proposed budget and the one adopted by the committee on Monday use money that would have gone to the 80 vacant positions to augment the city’s general fund, while using the savings from another 120 positions to pay for new spending within the police department. This week, the council got word that SPD had identified another 40 vacant positions, for a total of 240.
Council member Alex Pedersen opposed eliminating the 80 unfilled police positions, arguing that it would be wrong for the council to go against the “wisdom” of the City Budget Office, the mayor, and police chief Adrian Diaz, who want to keep as many positions vacant but funded as possible.
“Our mayor’s budget … did not delete these 80 positions, and if we trust in what the mayor asks for regarding public safety and the budgeting knowledge and skills and best practices of the city budget office, I don’t think we should do anything different here by abrogating or deleting these 80 positions,” Pedersen said.
Council member Sara Nelson added that eliminating vacant positions as a recurring budget line item could discourage people from applying for jobs at SPD and send a message to existing officers that the city did not support police hiring.
In response, council public safety chair Lisa Herbold pointed out that the budget fully funds the mayor and SPD’s hiring plan, which would increase the department by a net total of 30 officers in the next two years. (This hiring plan assumes a complete reversal, and then some, of current SPD hiring trends). It also keeps the remaining 160 vacant positions on the books, where they will be funded again automatically in 2025. For the city to need the 80 positions the council eliminated Monday, it would have to hire at least 190 net new officers, not counting new recruits who replace officers who leave the department. If that very unlikely scenario came to pass, the council could add funding for more officers—as it has many times in the past.
“It’s really disappointing that … some people seem unwilling to say that the hiring budget is fully funded for the next biennium for the council to act on,” Herbold said. “That would send a positive factual message, rather than … distort what an abrogation of positions would do for the budget.”
Nelson and Pedersen also cast the only votes against a Herbold-sponsored proviso, or spending restriction, requiring the police department to get council approval if they want to use their staffing budget for anything other than salaries and benefits, arguing it was important to give SPD special flexibility to spend their budget how they want to.
“I believe we should stop micromanaging the use of salary savings and exercise some humility going forward because we simply don’t know what needs will need to be met,” Nelson said. “[Extra] overtime, for example, if there’s an earthquake or a mass shooting or something.”
In a last-minute compromise with Harrell’s office, the council agreed to move parking enforcement from SDOT to SPD, as PubliCola reported Monday. The compromise amendment uses administrative savings from the move (almost $9 million a year) to pay for several council spending priorities, including $1 million in one-time funds to support the Public Defender Association’s LEAD and Co-LEAD programs, which Harrell’s budget partially defunded; $1 million to “activate” City Hall Park in Pioneer Square, which has been fenced off since the summer of 2021; and $1 million for RV parking and storage “associated with non-congregate shelter,” among other new spending.
In a separate amendment, the council provided an additional $2 million a year for LEAD and Co-LEAD, which the PDA says still leaves them $5.3 million a year short of what it needs to fully fund both programs. The two programs provide case management and (in the case of Co-LEAD) hotel-based shelter for people involved in the criminal legal system, including many with behavioral health conditions that make it harder to find housing.
Morales had more success with another amendment that would place a budget proviso, or restriction, on $1 million in 2023 spending from the city’s transportation levy, requiring SDOT to spend it replacing plastic bollards that do not actually “protect” bike lanes with concrete barriers that do.
Here are some more highlights from Monday’s meeting, which was the last chance for council members to make substantive changes to the budget; for budget changes the council agreed on prior to Monday’s meeting, check out our coverage of those changes from last week.
• The council turned down proposals to place extra scrutiny on two programs that the council’s more conservative faction, led by Pedersen and Nelson, generally oppose. For example, they voted to remove $1.2 million in funding (all numbers are two-year figures) that Nelson wanted to spend on two full-time city staffers who would evaluate the JumpStart tax, which was just implemented last year.
The council also rejected two proposals by Nelson to apply extra scrutiny to LEAD and Co-LEAD, which take a harm reduction approach to addiction and low-level criminal activity rather than the abstinence-only approach Nelson favors (more on that in a moment). Specifically, Nelson wanted detailed information about the PDA’s subcontracts with REACH, the homeless outreach provider, and the basic details of both programs.
The problem: A spike in interest rates has made mortgages unaffordable to many, reducing revenue from real estate sales that the city relies on to balance its budget.
By Erica C. Barnett
PubliCola management has been out of the office for the past couple of weeks (vacationing in a graffiti-covered post-apocalyptic European wasteland), which is why we haven’t been posting our usual detailed city budget updates. Luckily for us, city council budget chair Teresa Mosqueda decided to take an extra week before releasing her final budget balancing package, after the city’s Office of Economic and Revenue Forecast released a new revenue forecast last week that sent budget writers scrambling.
That new forecast predicts a sharp decline in revenues from a number of sources, including the sweetened beverage tax (SBT), the real estate excise tax (REET), and the retail, business, and sales taxes that make up the city’s general fund, which pays for everything from police salaries to homeless outreach workers.
For 2023, the new forecast predicts an additional general-fund shortfall of about $4.5 million. In addition, the new projections predict an additional sweetened-beverage tax shortfall of $1.6 million and an additional REET shortfall of $26.7 million. Over three years, those projections are $9.4 million, $4.5 million, and $64 million, respectively. Revenues from REET and the sugary beverage tax, unlike general-fund revenues, can only be spent on certain purposes, which limits the city’s ability to pull funding from either source to fill general-fund shortfalls (although elected officials have frequently tried); in addition, REET is largely tied up in mandatory debt payments on major bond-financed capital projects, making much of this funding source off-limits to annual budget writers.
Usually, when people refer to the city budget, they’re talking about the general fund, which represents the part of the city’s overall budget that the city council and mayor have the greatest ability to tweak. So let’s start there. On its own, the $4.5 million general-fund shortfall is not a hugely significant number in the context of a $1.6 billion budget. However, in late October, council members proposed budget amendments that would add $80 million in general-fund spending, which would have to be offset by still-unidentified cuts to Harrell’s budget proposal.
To vastly oversimplify, last week’s revenue forecast downgrade means that if the council wanted to fund all of their own priorities, they would need to reduce Harrell’s budget by $90 million. Obviously, many of these budget amendments won’t make it through—looking at you, new Seattle Fire Department program to promote “floatplane awareness”—but any additional spending requires an equivalent cut to Harrell’s budget plan.
And some of these amendments will be sacrosanct. For example, the council has shown virtually no enthusiasm for Harrell’s plan to cap annual increases on human service provider wages at a sub-inflationary 4 percent, effectively cutting these underpaid workers’ wages. (The exception is Councilmember Sara Nelson, a longtime business owner who wondered aloud why a subinflationary wage increase didn’t constitute a “raise.”) Increasing provider wages to the level currently required by law would cost about $7.1 million in 2023.
Other amendments would increase the city’s contribution to the King County Regional Homelessness Authority by $9.4 million annually to offset the loss of temporary federal funding that enabled shelters to reduce crowding during the (still-raging) pandemic; establish new tiny house villages; preserve the LEAD and Co-LEAD programs; and pay for new and existing crisis response programs. Proposals to expand human services will be harder to eliminate than, say, an amendment from Nelson that would spend $1 million on an unspecified new addiction treatment center—something King County, which has jurisdiction over public health and addiction programs, would ordinarily fund.
Achieving a new budget balance will, as always, require some combination of spending restraint (passing only some proposed amendments) and cuts (bringing Harrell’s proposal, which includes tens of millions in new spending on priorities like removing encampments and graffiti abatement, down to size). Council members had already set their sights on Harrell’s proposal to dramatically expand the encampment-sweeping Unified Care Team and his plan to spend $1 million on a gunshot surveillance system like Shotspotter, which civil liberties advocates, including the ACLU, oppose.
Another option will be for council members to overturn a law they passed last year restricting the use of JumpStart payroll tax revenues, which are supposed to pay for affordable housing, equitable development, and Green New Deal programs, to backfill the city’s general fund. The new law says the city can only use JumpStart revenue for non-JumpStart purposes if the general fund falls below $1.5 billion. Harrell has proposed changing the law to pin the general fund baseline to inflation, allowing the city to use more of the earmarked money for non-JumpStart purposes.
The general fund is not the only budget area where the council will have to make some hard choices, nor is it the largest. Projected revenues from real estate taxes, which the city thought would continue to increase this year, have taken a nosedive thanks to rising mortgage rates and the resulting slowdown in housing purchases.
Because a large chunk of REET revenues pay for debt service, a fixed cost, or multi-year capital improvement projects such as road paving and maintenance, the city can only make limited changes to REET spending. Generally, that means cutting new or shorter-term capital projects. Some of these are improvements that mostly benefit city employees rehabbing the elevators at the Seattle Municipal Tower, for example—but others are the kind of visible, council district-level projects that voters tend to notice.
For example, Harrell’s proposed budget includes $2.5 million in new REET spending to promote “safety and accessibility” at City Hall Park; $10 million for a new Tribal Interpretive Center on the downtown waterfront; and $1 million to rehab at least one park restroom. Eliminating or delaying these programs, or any REET-funded capital project, will produce instant blowback from constituents, who will be voting next year in all seven district-based council races.
A spokesman for Harrell’s office said Monday that the mayor “recognizes that this is a challenging revenue forecast. … The mayor’s proposed budget makes critical investments in key priority areas including public safety, housing and homelessness, and the essential city services residents expect. Based on our collaboration throughout this process, we believe the Council will ensure these priorities remain adequately funded in the final budget.”
PubliCola has calls out to several council members, including Mosqueda, and will be posting additional budget updates later this week.
MHA’s modest upzones on a sliver of Seattle’s single-family land include (l-r) residential small lot, low-rise 1, and low-rise 2. Images via City of Seattle.
By Josh Feit
The JumpStart tax, city council member Teresa Mosqueda’s payroll tax on big employers like Amazon, is posting standout numbers. This year, JumpStart will fund $97 million in affordable housing investments, including nearly $80 million for 1,769 units of affordable rental housing. Last year, the $71.4 million it provided toward affordable housing amounted to almost half the $153 million total raised by all the city’s affordable housing funding streams.
The Jump Start tax teases out the nexus between surging tech job growth and housing prices by capturing nouveau corporate Seattle’s impact on the market. That is: As the hyper growth of tech companies like Amazon inflate local housing prices, the city is taxing them to help fund affordable housing. It’s a good look, and it seems like a logical offset for the influx of high-earning tech employees. And, let’s be honest: It also feels good.
However, as much as I agree with the logic of an Amazon tax, and as much as it’s bringing in, I think there’s a more germane and effective way to raise affordable housing dollars. Luckily, it’s already part of our affordable housing strategy—sort of.
I’m talking about 2019’s Mandatory Housing Affordability program, a fee on new development in designated parts of the city, which brought in an impressive $50 million in 2021 itself.
Given that Jump Start outpaced MHA by $20 million, why am I focusing on MHA as the smarter policy? For starters, MHA, which came with a series of targeted upzones that allow more housing in more places, actually attempts to undo the root cause of our housing crisis: prohibitive zoning laws that discriminate against multi-family housing in the vast majority of the city. These historical zoning laws cordon off nearly 75 percent of the city from multifamily housing, pinching supply and thus fueling steep housing prices.
While conventional wisdom holds that upzones and new development inflate housing costs, a 2021 UCLA report found that the latest studies show the opposite: Five out of six studies looking at the impact of market-rate housing determined that new market-rate density “makes nearby housing more affordable across the income distribution of rental units.”
Conversely, those who warn that upzones lead to gentrification, have a hard time explaining why gentrification is alreday happening in Seattle today, under our status-quo zoning that prohibits the very density urbanists are calling for. More logically, the prohibition on new development in so much of the city is spiking prices for the limited housing that is available.
Seattle gained 130,000 people between 2010 and 2020 (13,000 a year) and another 8,400 during the first year of the pandemic, many of them tech transplants. These newcomers didn’t cause the housing shortage, though—they merely brought it into sharper relief. The MHA strategy, which encourages housing development, is actually in the position to do something about it.
MHA, which came with a series of targeted up-zones, actually attempts to undo the root cause of our housing crisis: prohibitive zoning laws that discriminate against multi-family housing in the vast majority of the city.
And MHA might be worth more money than JumpStart. The MHA data point that interests me most is $13.4 million, a subset of MHA dollars raised. This figure represents the amount of money MHA raised specifically from developments built on land where it was previously prohibited: multifamily housing built on land that was upzoned in Seattle’s previously exclusive single-family zones.
Passed in 2019, MHA didn’t merely tack a fee onto new development; it also upzoned tracts along the edges of 27 single-family zones, allowing small-scale density in some previously single-family-only neighborhoods by expanding low-rise and neighborhood commercial zones and creating a new “residential small lot” zoning designation. These modest upzones, which the city adopted on just 6 percent of single-family land, allow new housing that fits in seamlessly with single-family houses.
Interestingly, this modest bit of geography— 6% of the single-family zones, or 4% of the city’s total developable land—accounted for nearly 20 percent of all MHA dollars. This outsized production could represent an upward trend. Last year, the same modestly upzoned fraction of single-family areas brought in 12 percent of the money raised from MHA overall, $8.3 million out of MHA’s $68.3 million.
This disproportionate performance indicates that pent-up demand for development on formerly cordoned-off land could be a spigot of affordable housing cash. Consider: There’s a lot more developable land where that 6 percent came from, and the city could increase the potential density of those areas more dramatically than it has to allow multifamily and commercial development, for example. If the city council and Mayor Bruce Harrell had the courage to stand up to Seattle’s NIMBY class by extending the upzones further into exclusive single-family areas and by opting for denser upzones, Seattle would generate far more cash for affordable housing.
Sure, $80 million from the JumpStart tax is helping a lot. But the truth is, we need far more money for housing. According to the Office of Housing, MHA helped fund 990 units in 2021. But, according to the Regional Affordable Housing Task Force , we need 12,000 a year. Unfortunately, JumpStart’s impressive figures could dampen any move to expand the more on-point MHA approach, which raises money for affordable housing (and could raise a lot more) while actually addressing the crux of the housing problem by freeing up land for development.
In this way, JumpStart could unwittingly play to the interests of single-family homeowners (and their ever-appreciating property values) by shifting the focus away from the central role these homeowners play in the housing crisis, holding them harmless and avoiding bold policy solutions by taking their communities off the table.
According to the MHA numbers, the 4 percent of Seattle that we timidly opened up to more housing construction is trying to tell us something: The table is bigger than we think.
Revenues from tolls on the SR 99 tunnel, which replaced the Alaskan Way Viaduct on the downtown Seattle waterfront, are coming in much lower than the state Department of Transportation assumptions, and will continue to do so into the foreseeable future, the state treasury department told the Washington State Transportation Commission this week. Deputy state treasurer Jason Richter told the commission that the new projections likely represent a “permanent reduction” in toll revenues, which pay for construction debt, ongoing maintenance, replacement and repair costs, and a loan from the state’s motor vehicle account.
In May of this year, for example, the state collected just under $5.7 million from tunnel tolls, about $3 million less than projected last year. That trend extends into future projections, which show a shortfall ranging from around 16 percent over the latter half of the 2020s to 30 percent or more in the future. In some years, according to the latest projections , toll revenues won’t be enough to cover debt service on the $3.4 billion tunnel and waterfront roadway project. By 2026, the projections show the tunnel project about $2.5 million in the red, and “then the difference starts to climb at a pretty uncomfortable clip,” Richter said, with a cumulative negative balance of more than $200 million projected 25 years out.
The state can make up for some of the shortfall, Richter told the WSTC, “but I’m suspicious that that’s not going to be sufficient to cover the entirety of this issue, given that the shortfall in a lot of years is equal to roughly a third of the revenue coming in.”
The COVID pandemic had unprecedented impacts on traffic into and through downtown Seattle, changing commute patterns and reducing the number of cars on every road. During 2020, the number of people using the tunnel plummeted to less than 40,000 vehicles a day, and that number has not increased much even as other roads, like I-5, have started to approach pre-pandemic traffic levels. Gas prices, which are currently at unprecedented highs, have also caused people to rethink how they get around, combine trips, and avoid unnecessary driving.
But even before the pandemic and $6 gas prices, people weren’t using the tunnel nearly as much as WSDOT predicted they would; in fact, once tolls went into effect in 2019, the number of vehicles using the tunnel dropped by 28 percent to fewer than 60,000. Contacted by email, WSDOT toll division spokesman Christopher Foster noted that “prior to the pandemic, trafficvolumes in the tolled tunnel were exceeding forecasts,” but both the forecasts and “baseline” tunnel usage are moving targets; while the tunnel was originally justified on the grounds that 130,000 cars would use it every day, the state has continually adjusted its forward-looking projections downward in light of actual traffic volumes.
One of the major reasons people aren’t driving in the tunnel is that there’s no real incentive to use it: If you can from point A to point B quickly and conveniently for free, why would you pay for the privilege? If you’ve driven in the tunnel, you’ve probably noticed that it often feels like an empty highway in the middle of the night—people avoid the tunnel in favor of existing surface streets, including the currently two-lane surface Alaskan Way, which WSDOT is currently widening into yet another highway.
Cary Moon, the founder of the People’s Waterfront Coalition, which advocated against the tunnel, is reluctant to say “I told you so.” But she will say that the data WSDOT used to justify building the tunnel—which initially projected 130,000 vehicles would use the tunnel every day—was “a joke” even before COVID came into the picture.
“Driving alone, especially in the tunnel, is dropping significantly and that’s’ a good trend long term,” Moon said. It’s also “what we knew would happen. … If we had invested in the right infrastructure, can you imagine what we could have done?”
But to WSDOT, despite its stated commitment to sustainability, the best outcome is one in which drivers get back in their cars and start using the tunnel again. The state could continue to boost toll rates, which currently range from $1.20 to $2.70 each way, to make up for lost revenues, and undoubtedly will, but higher tolls tend to lead to more diversion and people making different travel decisions. It’s a delicate balance.
“I think the transportation commission is doing their best to set tolls at a level that covers costs but also doesn’t cause excessive diversion,” Richter told PubliCola. The negative balance in WSDOT’s tunnel account is “cumulatively growing to the point where there’s going to have to be a conversation with legislators, as well as the transportation commission, to come up with a viable way to solve this,” Richter said. In other words, the legislature needs to come up with a solution, and funding, because the tunnel’s financial underpinnings are shaky.
“The bills have to be paid, and I have no doubt they will be paid—it’s going to be a question of, how do we do so without causing harm to the corridor and do so in a sustainable manner?”
At a press conference last month, Mayor Bruce Harrell stood at a podium and thanked Amazon for funding affordable housing in Seattle. With him stood the director of Amazon’s Housing Equity Fund and representatives of three housing development organizations led by people of color that are receiving loans or grants from Amazon totaling about $23 million: Mount Baker Housing, El Centro de la Raza, and Gardner Global, a Black-owned developer working on a mixed-use apartment project at the former site of Mount Calvary Christian Center in the Central District.
This is Amazon’s most recent disbursement from the $2 billion Amazon pledged last January for affordable housing in three of its employment hubs. Three of the projects, including the Mount Baker Village preservation project, are affordable to people earning up to 60 percent of the Seattle area median income, currently about $54,000 for a single person; Gardner Global’s development in the Central District will include units for households up to 80% of area median income.
Amazon is by far Seattle’s—and now Washington state’s—largest employer. Over the past six years, Amazon’s relationship with the city and its politics has been fraught, with dramatic tussles over taxes, heavy-handed bids to sway local elections, and tech worker protests over the company’s role in the climate crisis. Given this history, it’s worth looking more closely at Amazon’s investment in affordable housing: its scale, what it means for the recipients and the company, and its political significance.
To begin with the obvious, $23 million is not a great sacrifice for Amazon, especially considering that $15 million comes in the form of low-interest loans that will be repaid.
JumpStart brought in an impressive $248 million last year. If Amazon’s tax bill really is on the order of $124 million, then these grants amount to about one-fifteenth of that.
It’s instructive to compare the $8 million Amazon will spend on two of the projects in grants to what the company may be forking over to the city this year thanks to JumpStart Seattle, a payroll-based tax paid by the city’s largest employers that passed in 2020.
Neither Amazon nor the city will disclose that number. But back-of-the-napkin math suggests that the company could easily be responsible for over half the total revenue from the tax, given the size of its Seattle workforce and the graduated structure of the tax, whose rate rises based on company size and worker compensation. JumpStart brought in an impressive $248 million last year. If Amazon’s tax bill really is on the order of $124 million, then these grants amount to about one-fifteenth of that.
According to Seattle Councilmember Teresa Mosqueda, “$97 million from JumpStart went to the Office of Housing to be disbursed in the 2022 calendar year” to support affordable housing projects and services. Given that another large chunk of the first year’s revenue went to plug pandemic-related budget holes, she said, “we should be able to do even more next year.”
Those city funds are already enabling property acquisition and affordable housing development at least 16 sites around the city. I wish those projects and the progressive tax revenue supporting them got as many press conferences and as much media fanfare as Amazon’s housing fund has inspired.
All this is not to say that Amazon’s voluntary grants and loans are unimportant to their recipients. Cobbling together funds to build and operate affordable housing is extremely challenging. Estela Ortega, executive director of El Centro de la Raza, which received $3.5 million for an 87-unit project in Columbia City for families earning between 30 and 60 percent of area median income, says the grant is helping to close a gap caused by rapidly rising costs.
“We had a $54 million budget at the first of the year, then our contractor did a new estimate and it went up to $58 million,” Ortega said. “Amazon’s money is critical. If we had to raise another few million, we would not be breaking ground on January of 2023, which is our plan.”
This also illustrates that Amazon’s contributions, though they may be crucial, are one small part of the funding for these projects: That $3.5 million almost covers the sales tax costs for El Centro Columbia City. The project is also receiving $5 million from the state Housing Trust Fund and over $11 million from the city of Seattle, among other sources. (Interestingly, Seattle’s contribution includes over $7 million from JumpStart. If my speculative math is correct, that means Amazon may be paying as much into the project through taxes as through the grant.)
You can’t really blame Amazon’s public relations team for titling its press release—“Amazon to fund construction of 568 affordable homes in Seattle”—to the company’s best advantage, subtly implying that Amazon might be footing the entire bill. It’s less forgivable for the Seattle Times to begin its coverage the same way—“Amazon committed Thursday to providing $23 million to create and preserve nearly 600 affordable homes in Seattle”—and then make no mention at all in the rest of the piece of other funding sources or the total costs involved. The average member of the public, no expert on housing development and finance, could easily walk away with the impression that Amazon is singlehandedly gifting us 600 affordable homes.
None of this might matter, and might be considered nitpicking, if there was no larger political meaning to Amazon’s actions. But the tenor of the June press conference, with Amazon in the role of good corporate citizen, contrasted sharply enough with the fights of recent years to make one wonder. When Amazon’s housing fund and an initial round of recipients were first announced in 2021, the absence of projects in Seattle was conspicuous. Instead, $185.5 million (mostly in loans) went to projects in Bellevue, every pundit’s favorite foil to Seattle when it comes to Amazon-politics. So what does it mean that Amazon is suddenly playing so nice with its hometown? Continue reading “Amazon’s Housing Fund Sends a Political Message”→
1. Bird, a scooter provider that’s already ubiquitous in cities across the country, will soon enter the Seattle market, while Spin and the venture-backed sit-down scooter company Wheels will no longer be seen on Seattle streets. In addition to Bird, Link and Lime will continue as scooter providers in Seattle.
The Seattle Department of Transportation announced the scooter shuffle on its website last week, just weeks after publishing the results of a controversial, nonscientific survey concluding that more scooter riders are injured while riding than previously reported.
The city will also permanently permit a new bikesharing company, Veo, whose low-slung bikes have vestigial pedals but function more like a sit-down scooter, with a throttle that allows riders to propel them while using the pedals as footrests.
Seattle’s relationship with scooters (and bikesharing) has long been ambivalent. In 2020, two and a half years after banning scooters entirely, the city took a baby step forward by issuing permits to three companies for 500 scooters each. Since then, the city has expanded its scooter permits to allow each of three providers to put 2,000 scooters on the streets; Lime, which provides both e-assist bikes and scooters, has a fourth permit for a total of 2,000 bikes and scooters.
According to SDOT’s scoring matrix, Spin narrowly lost out to Bird, Link, and Lime after scoring slightly lower on two measures: Parking (which includes policies the company implemented to make sure people parked correctly and how it responded to improperly parked scooters) and “operations and equity,” which included a number of factors such as how the company responds to complaints and its efforts to place scooters in “equity areas” outside the center city, including southeast and far north Seattle.
According to the city’s scooter data dashboard, Wheels scored particularly poorly compared to other companies, including Spin, at providing equitable access to its scooters.
Veo, which operates like a scooter but is classified as a bicycle, poses what SDOT spokesman Ethan Bergerson calls “interesting questions” for the city. Unlike traditional scooters, Veo devices are legal on sidewalks; because they aren’t classified as scooters, they also occupy one of just three potential bikeshare permits, which could limit the number of shared e-bikes allowed on city streets in the future, if other companies decide they want to enter the Seattle market.
“The bike/scooter share landscape is very dynamic and has shifted considerably since the bike share program began in 2017,” Bergerson said, and now includes “more companies offering devices which combine some of the features of bikes and some of the features of scooters. … If this market trend continues, it may make sense to consider how to adjust our permits to reflect the changing technology and industry trends.”
2. The Seattle Public Library is ending its contract with the Downtown Emergency Service Center, which for more than five years has provided a part-time “community resource specialist” to connect patrons to food, social services, and shelter, and hiring its own social service specialists.
The new hires include an assistant managing librarian at the downtown branch to oversee the work; a new social services librarian who will “work with information staff to maintain current information and contacts, coordinate the Bus Ticket program, and act as a link between our regular information services and our Community Resource Specialists,” according to library spokeswoman Elisa Murray; and two new in-house community resource specialists, including one who will focus on outreach to youth and young people.
“While this new model doesn’t necessarily provide patrons more time with on-site staff, we do think we can maintain more partnerships with this model, which we hope will lead to increased opportunities for patrons to access the supportive services they need,” Murray said.
For years, libraries (including Seattle’s) have debated whether, and to what extent, library staffers should be responsible for connecting patrons not just to library materials, but to social services and resources outside the library’s direct control. By hiring staff to oversee some of this work, SPL is making a more direct investment in the the theory that libraries can and should do both.
3. A new independent expenditure group representing marijuana retailers, called People for Legal Cannabis, just filed with the Seattle Ethics and Elections Commission, reporting $16,000 in debt to the polling firm EMC Research. The group’s intent: To fight off potential legislation, first reported by David Hyde at KUOW, that would impose an additional sales tax on weed sales in Seattle. If the legislation, currently being floated by the United Food and Commercial Workers Local 3000, passes, the group could propose a referendum to overturn the law.
According to a presentation first posted on KUOW, which PubliCola obtained independently, the UFCW’s still-nascent proposal would impose a “cannabis equity tax” of 25 cents a gram on flower; $2.00 per half-gram of high-potency concentrates; and a penny per milligram of THC in everything else. The money would fund a paid “cannabis equity commission”; “workforce training” for cannabis workers; and a “cannabis equity fund” that would “prioritize the needs of those most impacted by the War on Drugs,” which locked up millions of Black and brown Americans for possessing and consuming weed. Continue reading “Seattle Shuffles Scooter Share Deck, Library Invests in Social Services, Campaign Forms to Fight Potential Cannabis Tax”→
1. During a briefing at the city council’s public safety committee about the city’s struggle to retain qualified staff in every department, City Councilmember Sara Nelson suggested there is no need to “study the benefit of [hiring] incentives” for police, “because it’s been shown to work in other cities—pretty much most if not all cities in our region.” With public safety “such a crucial issue right now,” Nelson continued, “this is something that doesn’t need a lot more study.”
Nelson, whose legislation to fund hiring bonuses will come before the same committee later this month, was responding to a presentation by the city’s Human Resources Department about a survey that concluded the biggest barrier to retention for most city staffers is the city’s 32-year-old job classification system, which creates artificial barriers to advancement for many city workers.
Her comments elicited immediate pushback from other council members, including committee chair Lisa Herbold, who pointed out that recent short-lived hiring bonuses did not lead to more applicants for police jobs, although they did get people to apply for jobs at the city’s new 911 call center. (After the city offered hiring bonuses for new SPD recruits in 2019, slightly fewer than one in five applicants said the hiring bonus was one factor in their decision to apply). Councilmember Andrew Lewis asked, semi-rhetorically, whether there was any city in the country that wasn’t currently struggling to retain officers right now. And Councilmember Teresa Mosqueda went further, apologizing to SDHR’s Keith Gulley “on behalf of the council” because “the work that you’ve done was impugned” by Nelson.
So, about that work: SDHR’s analysis found that, in general, hiring incentives serve as “a one-time quick fix that may not compensate for uncompetitive wages, difficult or unsupported work conditions, lack of opportunity to develop career relevance, experience and skills, and limited promotion opportunities” at the city, Gulley said. Additionally, signing bonuses for new hires can hurt the morale of existing employees who “feel undervalued and underappreciated” because they’re doing the same work with no extra reward.”
The hardest jobs to fill, according to the department’s survey, include carpenters, plumbers, and truck drivers as well as IT programmers, senior civil engineers, and public safety auditors.
The shortcomings of the city’s job classification system are especially troubling for mid-career employees, who frequently get stuck in mid-level positions because they lack a requirement, such as a graduate degree or specific college credits, to move up the ranks. Gulley gave the example of an accountant who had been at the city for more than 15 years but got stuck on the ladder because she hadn’t taken 24 hours of required coursework back in college. “That’s where the majority of our employees who have worked for the city for years get stuck,” Gulley said.
Of three possible scenarios, the city is using “baseline” assumptions in its forecast.
2. An economic forecast released by the city’s Economic and Revenue Council last week predicts the city will take in about $90 million more in taxes and fees this year than a similar forecast predicted six months ago, thanks to higher-than-expected revenues from sales taxes, the JumpStart payroll tax, and the tax on real estate sales.
In all, the city expects to collect about $711 million in general-fund revenues, which fund the city’s annual budget, in 2022—a 5.6 percent increase over 2021. The forecast also predicts the city will take in about $447 million in other taxes and fees that can only be spent on specific purposes, including taxes on real estate sales, which fund capital projects. Next year, the city predicts that revenues will continue to grow, but at a slightly slower rate.
Despite Democratic control in both houses, Washington state’s tax code remains deeply inequitable.
By Leo Brine
Last Thursday marked the end of the 2022 legislative session. Lawmakers only had 60 days to pass legislation, write and pass two supplemental budgets, and pass a transportation spending package. At the outset of the session, Democrats, who have a 57-seat majority in the house and a 29-seat majority in the senate, said they wanted to pass bills to help with housing affordability, homelessness, environmental sustainability, and the economy.
When it comes to housing, Rep. Nicole Macri (D-43, Seattle) told PubliCola, “it was not a great year in terms of policy.” Macri pointed out that Democrats killed Rep. Jessica Bateman’s (D-22, Olympia) bill to allow denser housing statewide (HB 1782) and Rep. Sharon Shewmake’s (D-42, Bellingham) accessory dwelling unit (ADU) bill (HB 1660), both of which could have helped the state increase its housing stock. Bateman’s bill would have required all Washington cities to include denser housing options, like fourplexes and courtyard apartments, in neighborhoods zoned for single-family housing, while Shewmake’s would have permitted mother-in-law apartments and backyard cottages in all types of residential neighborhoods.
When it comes to housing, Rep. Nicole Macri (D-43, Seattle) said “it was not a great year in terms of policy.”
The legislature also killed Rep. Strom Peterson’s (D-21, Lynnwood) tenant protections bill (HB 1904), failing to vote on it by the first legislative deadline. Michele Thomas from the Washington Low Income Housing Alliance said it was “one of the biggest losses of the session,” adding, “Democrats in the House shouldn’t have been afraid to vote on that bill.” The bill would have required landlords to give tenants six months’ notice before increasing rent; capped fees for late rent payments at $75; and provided tenants who could not afford a rent increase assistance moving somewhere they could afford. Thomas said the bill was tame and didn’t propose any kind of rent control, typically a third rail for legislators.
Democrats did manage to pass some homelessness bills that will provide temporary help to people living on the streets. The house and senate passed Rep. Frank Chopp’s (D-43, Seattle) bill that attempts to connect people under the state’s Apple Health (Medicaid) program with permanent supportive housing (HB 1866). Although the bill initially passed without funding, Democrats secured $60 million for the program in the capital budget. Macri saw the provision as a necessary upgrade. “Being on the budget team, I tried to focus on making sure we had strong investments because we didn’t have the strong policy I wanted to see pass,” she said.
To respond to the ongoing climate crisis, which is only getting worse, Democrats used their transportation package to try and reduce the state’s overall emissions by investing in electrified ferries, expanded transit services and better bike and pedestrian infrastructure.
Climate Solutions Washington Director Kelly Hall said she was pleased with the investments Democrats made with the transportation package and hopes they will allocate more of the funding from the transportation package toward electrifying heavy-duty machinery, like long-haul trucks and construction vehicles, between now and the 2023 legislative session.
While Hall supports the transportation package, she said the legislature failed to pass bills that would reduce emissions from the state’s gas-heated buildings and from other common polluters people don’t often think of. Hall pointed out Rep. Macri’s bill (HB 1918) would have exempted the purchase of energy efficient lawn equipment from the state’s sales tax and encouraged more people to ditch their gas-powered leaf blowers and lawnmowers for zero-emission models. Gas-powered lawn tools “emit a lot of toxic air pollution right in our communities,” Hall said. Continue reading “Olympia Wrapup: Democratic Majority Falls Short on Core Democratic Agenda”→
By Erica C. Barnett
1. Bird, a scooter provider that’s already ubiquitous in cities across the country, will soon enter the Seattle market, while Spin and the 
The city will also permanently permit a new bikesharing company, Veo, whose low-slung bikes have vestigial pedals but function more like a sit-down scooter, with a throttle that allows riders to propel them while using the pedals as footrests.
Nelson, whose legislation to fund hiring bonuses will come before the same committee later this month, was responding to a presentation by the city’s Human Resources Department about a survey that concluded the biggest barrier to retention for most city staffers is the city’s 32-year-old job classification system, which creates artificial barriers to advancement for many city workers. 
