Category: Taxes

Elections, Mayor Wilson, Taxes, Transit

Wilson Proposes Doubling Transit Sales Tax to Fund Local Bus Service Expansion

By Erica C. Barnett

Seattle Mayor Katie Wilson has proposed doubling a sales tax that funds transit service in Seattle, known as the Seattle Transit Measure, to 0.3 percent, up from the 0.15 percent tax that expires this year. The proposal would raise around $138 million over the next ten years to pay for bus service, service on the city’s two streetcars, and transit passes for low-income riders, among other programs.

The Seattle Transit Measure, originally known as the Seattle Transportation Benefit District, supplements bus service provided by King County Metro by adding service hours in Seattle. The transit measure came out of a failed attempt   2014; in 2020, a proposal to increase the tax from 0.1 percent to 0.15 percent passed with more than 80 percent of the vote.

The extra money would fund 280,000 bus service hours a year on top of Metro’s regular service, Seattle Department of Transportation director Angela Brady said during a press conference on Tuesday. According to SDOT’s most recent annual report on the measure, the tax paid for 143,000 bus hours in 2024. The new funding would also pay for service on the existing streetcars that run between downtown and South Lake Union and Capitol Hill, and would provide free annual transit passes to everyone living in Seattle Housing Authority buildings, a new expansion of the ORCA Lift program for people making up to 200 percent of the federal poverty level.

PubliCola is supported entirely by readers like you.
CLICK BELOW to become a one-time or monthly contributor.

Support PubliCola

Demonstrating how  much costs have increased, the original, 0.1-percent 2014 transit measure expanded transit access by about 350,000 hours a year.

At Tuesday’s press conference, Wilson pitched her plan to expand transit hours as an urgent matter of affordability.

“When transit is frequent, reliable, and affordable, it does more than move people from one place to another—it gives people freedom,” Wilson said. “Transportation is one of the biggest costs in a household budget, and most of that cost comes from owning a car. Gas, insurance, repairs, parking, monthly payments, and maintenance all add up fast. So when we make our transit system better, we make it possible for more households to live car-free or car-light, and that could put hundreds or thousands of dollars back into a family’s budget. That is real affordability.”

If voters approve Wilson’s proposal, it will bring Seattle residents’ total sales tax burden close to 11 percent. Sales tax is the most regressive form of tax voters regularly pay, meaning that the poorer you are, the greater the percentage of your income you spend on the tax.

Asked about the seeming contradiction between her affordability pitch and the increasingly unaffordable sales tax burden, Wilson said it’s “unfortunate that we don’t have more progressive options for funding our transit system.” But, she said, “when we’re investing in public transit and making it possible for people to live car free or car light, when we’re investing in affordable fares, those are really direct supports that are creating affordability for the people in our communities that need it most.”

Under the state law that authorized the transportation benefit district, the city could also propose a vehicle license fee of up to $60—a tax on drivers that would directly fund the city’s primary alternative to driving. Asked why she didn’t do so, Wilson said she believed a license fee increase might prove too “controversial” to pass.

“I think we’ve seen car tab measures rouse more organized opposition, and I think we wanted to stick with something that we were really confident Seattle voters were going to be able to enthusiastically get on board with.”

A countywide measure to fund transit service with a 0.1 percent sales tax increase and a $60 vehicle license fee failed 55 to 45 percent. Since then, the city has relied on sales taxes alone to pay for additional transit service.

Wilson will have to move her proposal through the city council, starting with Rob Saka’s transportation committee. That committee will get an initial briefing on the proposal on Thursday. So far, Wilson has announced most big-ticket legislation without lining up council support or identifying council sponsors in advance. Saka, who was not present at Wilson’s press conference, did not immediately respond to a request for comment on the proposal, but we’ll update this post if we hear back.

public safety, Taxes

Seattle Considers Using Special Fire District Tax to Close Budget Deficit
Photo by Joe Mabel, via Wikimedia Commons, CC BY-SA 3.0

By Erica C. Barnett

Seattle Mayor Katie Wilson and the City Council are discussing whether to close a nearly $150 million budget shortfall by moving much of the Seattle Fire Department’s budget out of the city’s general fund by creating a special fire district, which—if approved by voters—could levy additional property taxes, freeing up hundreds of millions of general budget dollars for other purposes.

Wilson’s office confirmed that they are working with the fire department on a potential fire district, saying the city can no longer rely on the usual budget tricks or cuts alone to address a $175 million deficit  next year, which amounts to about 10 percent of the city’s general fund. “The gap is far too large to address with the kinds of temporary fixes that have been used in the past, and closing this deficit with cuts alone would require reductions in critical services and substantial layoffs across departments,” a spokesperson for Wilson’s office said. “Half of the general fund goes to public safety and human services, so there are no easy solutions here.”

A fire district would also be a way to raise revenues while steering clear of a state-imposed cap on local property tax levies that limits local levies to $3.60 per $1,000 of assessed value. The city is quickly running up against that limit.

In a press release Wednesday night, the Seattle Firefighters Union said the union “is currently evaluating the mayor’s plan.” Union president Kenny Stuart did not return a call seeking comment.

The spokesperson called a fire district one “potential path forward to stabilize SFD resources while also protecting other public services. … We have been working closely with SFD Chief Scoggins as well as the leadership of Local 27 to see if we can find a path forward that balances varying needs around revenue, public safety, and good governance.”

Prior to this year, Seattle had the authority to set up its own fire district, but there was no benefit to doing so: Any taxes the district levied would have to be offset by a reduction in other property taxes. The state legislature changed the law governing fire districts this year to give Seattle the authority to levy taxes (or a fee called a “benefit charge”) outside the existing property tax cap—meaning that the city could increase taxes without bumping up against the $3.60 limit.

“It’s just additional revenue flexibility and authority,” said Candice Bock, government relations director for the Association of Washington Cities, which supported the legislation. “Cities have to fund everything within their existing property tax levy authority, and this … creates more capacity.”

Wilson has asked all city departments, including the Seattle Police Department, to come up with potential cuts ranging from 3 to 5 percent of their budgets to close a deficit created in part by “structural issues”—costs, including labor, are growing faster than city revenues—and in part by her predecessor Bruce Harrell’s decision (supported by the city council) to pile on tens of millions in new spending every year, including a $100 million spree in the 2025 budget.

The fire department’s budget is around $350 million. Moving even half that amount into a new fire district would close next year’s budget deficit. However, that would also mean that funding for some of the city’s most basic public safety services—protecting residents from fires and responding to emergency calls—would be put to a periodic public vote. Seattle already uses local levies to fund its libraries, parks, and transportation system, but putting fire services up to a public vote would put the city on a potentially risky limb.

“Cities will have to continue to figure out a way to fund it if voters don’t like this option,” Bock said.

If the city puts the fire district plan on the ballot this year and it passes, the district will be a separate government entity under the direct control of the city council, which would act as its board of directors—similar to the way the council serves as the governing board for the city’s Park District, which oversees parks levy spending.

Maybe Metropolis, Mayor Wilson, Taxes

The Gaffe Faff: Wilson isn’t Misspeaking. She’s Delivering.

By Josh Feit

Desperate to make anything stick to our unflappable and breezy left-wing mayor, Seattle Times columnist Danny Westneat tried to create the narrative that Mayor Katie Wilson is prone to gaffes. He didn’t mean it in the same way the damaging label once dogged klutzy president Gerald Ford in the 1970s. (Ask Claude about Ford and the Air Force One stairs.) Or the way we mean it when we talk about Trump getting his facts wrong 24-7. What Westneat means is: Wilson has said a few things about tax policy that he disagrees with. He’s evidently the keeper of common sense.

On several occasions now, Wilson has acknowledged, with gusto and millennial nonchalance, that she’s not cowed by the business class.  Specifically, when questioned about the state’s new “millionaires’ tax” during a recent appearance at Seattle University, Wilson mockingly said “bye” to rich people who choose to flee. And while promoting progressive tax policy at an earlier event, Wilson described Seattle as “filthy rich.”

She was hardly wrong. Between 2013 and 2023, the number of millionaires in Seattle grew by 72 percent, putting us in the company of other tech boom towns like Austin and the San Francisco Bay Area.

To characterize Wilson’s statements as “gaffes,” Westneat assumes Wilson has unwittingly said what she really thinks—and, more importantly, that she’s been nefariously hiding something.

But she hasn’t been hiding anything. That’s what drives Westneat bonkers. The editorial team at the Seattle Times still can’t wrap its head around the fact that Wilson openly ran as a socialist and won. They’re now rationalizing her victory by pretending she has a secret agenda.

Westneat calls Wilson’s pronouncements “revealing.”  Only to someone who’d be surprised to find books in a library.

Wilson, the first mayor in memory who seems to actually like the job, is brazen about being a Capitol Hill lefty. In March, I saw Wilson wear her politics on her thrift-store sleeve during an address to Seattle’s capitalist class in a convention center ballroom at the Downtown Seattle Association’s annual State of Downtown event. Just like the supposed gotcha fodder she hand-delivered at Seattle U, when she insouciantly defended progressive taxes, she gleefully reiterated the same pro-tax message to the business crowd at the DSA. She openly described herself to the ruling class in attendance as “a progressive and a socialist”—and then paused to say it again, in case anybody missed it.

There’s just no gotcha to get. These aren’t “gaffes.” Wilson said what she she openly believes, including her assessment that the narrative about millionaires fleeing the state is, as she told the SU crowd, “overblown.” And she’s right. As the New York Times reported this week in a story about Wilson’s co-conspirator, NYC mayor Zohran Mandami: “Research shows that past tax increases by states have not led to an exodus of wealthy residents.”

It’s also important to note that Wilson’s derisive comment was specifically about the tiny number of high-income people who may leave the state—as opposed to those who may grumble, but decide living in a thriving city like Seattle is worth paying higher taxes. She isn’t demonizing the wealthy. She’s ridiculing wealthy people who don’t prioritize their larger community.

There’s also another group of people in Wilson’s calculation. Lower-income people who don’t have the luxury of deciding whether or not to stay, but instead, are forced out by Seattle’s insuperable cost of living. Raising taxes on the wealthy to pay for affordable housing and transit is one way to help make sure working-class residents aren’t displaced. Which is a much more pressing and concrete concern for a mayor than the notion of millionaires on the lam.

“We continue to have one of the most regressive tax systems in the country in this state,” Wilson said with typical candor at a pro-social housing event in February, evidently sounding like Che Guevara or, I don’t know, centrist state Democratic Sen. Jamie Pedersen (D-43, Seattle). (Pedersen led the charge for the state’s new tax on people who make more than a million dollars a year.) “It is very gratifying to know that we’re going to be able to use a little bit of that wealth and put it to work building housing and operating housing,” Wilson concluded. 

In another recent attempt by the conservative media to catch Wilson in a supposed gaffe, talk radio seized on a press conference last month where she announced a new bus lane. They accused her of  being privileged because she said she takes her daughter to Seattle Center on Metro’s Route 8. (Yep. Taking the L8 up Denny is apparently elitist.)

Unsurprisingly, the ploy didn’t work. Wilson, who co-founded the Transit Riders Union and ran on improving bus lanes, simply doubled down on her new bus-only lane plan and playfully trolled the apoplectic media on Instagram.

In case the Seattle Times doesn’t follow Wilson’s Reels, they might want to watch this one, because she offers up another consistent core belief that they could spin as a “gaffe.” Wilson said: “As our city keeps growing, there just isn’t room to keep adding more cars to our roads. When we make it possible for more people to choose public transit for more trips, more people can get where they want to go and everyone wins, including those who drive.”

Trying to portray Wilson as gaffe-prone when all she’s doing is demonstrating her commitment to the progressive agenda that she openly ran on last year is just sour grapes from the Seattle Times. It also shows how flummoxed they are with her casual charisma. As they reported themselves last year, the anti-Wilson campaign couldn’t get traditional anti-left memes to stick to her. This latest iteration doesn’t track either.

City Council, Taxes

Rivera Plays Grinch to Library Supporters, Saka Holds Committee Hostage for Extended NBA Rally

1. Seattle City Councilmember Maritza Rivera played Grinch to library supporters earlier this week, saying she will not support any amendments that raise the price of a $410 million library levy proposed by Mayor Katie Wilson last month. After a parade of library supporters told Rivera’s select committee on the library levy that they support increasing funds for operations and maintenance but the city could do more, Rivera said it
“would be fiscally irresponsible to increase the proposal given the city’s other needs.”

“It is unfortunate,” she continued, “that this is the city’s financial reality, and I take no joy in bringing this up, but this is where we are now,” given growing uncertainty about the national economy and the fact that the city is approaching a state-imposed cap on property taxes. Under state law, local levies can’t exceed $3.60 per $1,000 of property value. Seattle and King County are both approaching the cap, which can only go up if the state legislature decides to increase it.

Wilson’s proposal represents about a 47 percent increase over the 2019 levy, adjusted for inflation; the council’s amendments, which include funding for maintenance at the beautiful but hard-used downtown library, a seismic retrofit at the Columbia Branch library, built in 1915, and cooling systems, would push the total closer to half a billion dollars. (Dan Strauss declined to provide a price tag for his three amendments).

Rivera acknowledged that some amendments will probably make it through over her objections. She wanted to make it clear that she supports libraries, she added, lest she become a victim of online “cancel culture.”

2. Council chambers were turned into an NBA booster clubhouse for about 90 minutes on Thursday morning, as Councilmember Rob Saka gathered a group of Sonics supporters to effuse about how excited they are to “bring back our Sonics” in an extended pep rally that took up 90 minutes of Saka’s transportation and Seattle Center committee.

Saka, who made up his own “informal” committee title and added “sports” to its name, did come prepared with a list of questions for the panel, which included Deputy Mayor Brian Surratt, prominent Republican (and former NBA player) Spencer Hawes, Save Our Sonics founder Brian Robinson, and a rep from Climate Pledge Arena. A sampling:

“What excites you the most about the prospect welcoming our Sonics back home?”

“What are the strongest indicators today that Seattle is an undeniable NBA market?”

“Where do grassroots efforts like Seattle NBA fans have the most influence and impact?”

” What makes Seattle uniquely prepared and positioned to become the sixth city to have a team in all six leagues?”

“What story about Seattle basketball is resonating most right now?”

“What’s your preferred color for a new NBA franchise in Seattle?”

And this one, just for council members: “What will the headline read the day the Sonics finally do return?”

No word on whether Saka had a basketball hidden behind the dais.

legislature, Taxes

“Millionaire’s Tax” Will Be Offset by Cuts to Sales and Business Taxes, Could Be Out Next Week

By Erica C. Barnett

State house and senate leaders say their proposal to pass an income tax in Washington state will be paired with reductions to business taxes the legislature just passed last year, but that the bill will not be “revenue neutral,” as some progressive advocates had feared. That means the new “millionaires’ tax” will help pay for things like public education and health care, rather than being used entirely to offset reductions in other taxes, such as the business and occupation tax.

“More than half has to be additive,” House Majority Leader Joe Fitzgibbon said. “We’ve talked about ranges between 50 and 75 percent [new revenues.” I don’t know where within that range we’re going to ultimately land, but we wouldn’t do this if we weren’t getting a significant revenue boost” of between $3 billion and $4 billion a year.

Senate Majority Leader Jamie Pedersen said he anticipated that the proposal will include tax cuts that will offset between 25 and 40 percent of the revenues from the new income tax.

“Representative Fitzgibbon and the governor and I are arm-wrestling over what the tax reduction will be,” Pedersen said.

The underlying income tax proposal, a 9.9 percent tax on income (including capital gains) of more than $1 million in any calendar year, has the tentative support of Gov. Bob Ferguson, who wants to use the tax to fund the Working Families Tax Credit—an annual tax refund for low- to moderate-income families. In the short term, Ferguson has also proposed tapping funds from the Climate Commitment Act, Washington’s pollution tax, to fund the tax credit, which currently comes out of the state’s general fund.

Fitzgibbon said the cuts to other taxes will probably include cuts to the business and occupation tax increases and surcharge on large businesses that just passed last year. The surcharge—an extra 0.5 percent tax on revenue over $250 million—is supposed to raise about $550 million a year once the state starts collecting it in 2027. ”

“Obviously, there’s some businesses that have plenty of ability to pay [the surcharge], but there are some businesses, like hospitals or food wholesalers, where that increased tax liability makes its way back to people,” Fitzgibbon said. “The B&O surcharge is currently scheduled to run though 2030. The question is, could you sunset it earlier if you had the income tax?”

Pedersen said Gov. Ferguson “has asked for pretty dramatic expansion of the small business credit,” a tax exemption for small businesses that bring in less than $100,000 a year. Ferguson initially predicated his support for the millionaire’s tax on expanding the credit to businesses making up to $1 million a year. “That, as it turns out, is wildly expensive and probably not doable, but we could bump it to to $250,000 or $300,000— that’s a possibility,” Pedersen said.

Ferguson’s office did not respond to a request for an interview.

The income tax bill will also likely include a proposal to eliminate state sales taxes on some personal care and hygiene items, such as diapers and shampoo (“everybody uses shampoo!” said Pedersen, a man with a full head of hair) and prepared foods.

If the legislation passes, it will face at least two further hurdles. First, right-wing initiative funder Brian Heywood has already indicated he plans to file a measure to repeal the tax. If businesses end up opposing the tax and funding an initiative to repeal it, that could help Heywood fund a real campaign—one that’s more successful than his previous anti-tax efforts.

Fitzgibbon said he’s “pretty confident we can withstand a ballot challenge … especially if voters are seeing investments in things like education and health care.”

Pedersen said he’s seen polling that suggests people are less concerned about getting relief on specific taxes, like the state sales tax, than they are about the need to fund critical services and make the tax system more fair at a time when the federal government is subjecting blue states to ideological tests and funding cuts.

“If we have a more or less even campaign, where we can get out messages about the tax system and this 9.9 percent tax could lead to $4 billion a year of income that could help us invest in public schools and health care and avoid cuts, we think we will have a winning campaign,” Pedersen said. “If the spending is five to one against us, then it starts to become tough, because then the airwaves are full of ‘the legislature can’t manage its way out of a paper bag.'”

If the legislature passes a statewide high-earners’ income tax, and if voters agree it’s worth preserving, there’s still one more obstacle to a statewide income tax: A 1933 ruling by the state Supreme Court, which found that a progressive income tax would violate the state constitution’s uniformity clause, which says that different types of property can’t be taxed at different rates. Many legal experts believe this ruling, which defines income as a type of property, is weak, and are eager to open the decision to scrutiny after 92 years.

Speaking to PubliCola on Tuesday, Pedersen said he hopes to have a proposal to present publicly by next Friday. “The house, the senate, the governor, and leadership are mostly aligned on this. We still have a bunch of work to do. We have to talk to our caucuses. But we’re in a very different position on revenue than we were last year on the wealth tax, where there was enthusiasm from the caucuses but no support from the governor.”

City Council, Mayor Harrell, public safety, Taxes

Council Takes Up Harrell’s “Inherently Unsustainable” Budget; New Spending Includes $800,000 in Speculative AI Spending
Mayor Bruce Harrell, speaking at AI House in September

1. Your sales taxes are going up next year, thanks to a vote by the City Council Tuesday that approved a 0.1-cent increase that can, in the future, be used for any “public safety” purpose, including programs the city is already funding through its general fund.

The new tax, authorized earlier this year by the state legislature, will add $23.7 million in new funding to the budget to pay for 24 new CARE Team first responders, keep the Law Enforcement Assisted Diversion program going, and fund treatment, firefighters, and other non-police public safety programs. It also includes $15 million to supplant general fund spending on CARE, giving the city $15 million more to use on any purpose.

But, as a City Council central staff memo on the budget notes, there’s nothing in the state authorizing legislation that requires the city to use the new sales tax on new programs. (The original idea behind the legislation was that cities would use the tax increase to pay for police.)

According to the central staff analysis, Mayor Bruce Harrell’s proposed budget is unsustainable and relies heavily on fiscal sleight-of-hand to come up with a balanced budget in 2026, tumbling precipitously into massive deficits in 2027 and beyond. These tricks include relying on a one-time $141 million fund balance left over from 2025, which won’t be there to balance the budget next year; funding programs that will be necessary long-term, like food assistance for people losing federal benefits, with one-time resources, so that they don’t count toward future deficits; and assuming a $10 million “underspend” every year in the future, allowing the mayor’s budget team to chop $10 million off each year’s expenditures automatically without actually making cuts.

Referring to the fund balance, the memo notes, “The Mayor’s reliance on this $141 million one-time resource to balance his proposed spending for 2026 reflects the inherent unsustainability of the 2026 Proposed Budget, and demonstrates the basic magnitude of the mismatch between the City’s expenditures and its reliable, on-going revenues.

This damning assessment by the council’s own central staff could have implications throughout the budget, which the city council will begin discussing in detail today. What it could mean for the public safety sales tax, specifically is that, if the council passes Harrell’s unsustainable budget mostly as-is, future councils (and a potential future mayor Katie Wilson) could choose to use the money not to fund CARE and LEAD and treatment, but to pay for police, fire, and other basics that would ordinarily be paid for by the general fund.

In other words: Like the JumpStart payroll tax fund, which was supposed to pay for specific program areas (housing, small businesses, Green New Deal, and equitable development), the public safety tax could be used in the future as a slush fund to pay for programs that have historically been funded out of the city’s general budget.

The proposed budget adds about $53 million in new spending compared to the endorsed 2026 budget.

PubliCola is supported entirely by readers like you.
CLICK BELOW to become a one-time or monthly contributor.

Support PubliCola

 

2. One of the new initiatives Harrell’s proposed 2026 budget would fund is Permitting Accountability and Customer Trust (PACT) program—an $800,000 proposal that will purportedly “streamline the permitting application process and improve customer services using Artificial Intelligence and data integration.”

Callie Craighead, a spokeswoman for the mayor, told PubliCola the city hasn’t picked a vendor for the PACT funding yet. “The integration of AI tools is part of the City’s most concerted effort to date to reduce permitting time, making it faster and easier to build housing across Seattle,” she said.

Harrell is all-in on AI; at an event at the startup incubator AI House last month, he told the crowd, “If you’re thinking, ‘Maybe there’s an opportunity to monetize these things the city’s working on, that’s fair game, by the way. Faster permits—we know that AI can play an incredible role there. …  Time is money, and to the extent we can reduce permit processing times, this would be an added benefit for everyone involved in that process.”

Craighead said the new “AI tools” will help permit applicants catch errors before they submit applications; help “staff apply City code more consistently and efficiently, [and help] the City find opportunities to simplify and streamline policies.”

There are some companies that claim to reduce permitting times using AI chatbots and near-instant plan reviews, but it’s unclear to what extent these tools can actually supplant the human workers who currently work with developers and homeowners on permits and ensure compliance with the city’s complex codes by, for instance, talking to people and answering questions directly and inspecting conditions on the ground.

Moving away from actual employees to tools created by AI startups—a change the city’s new AI plan refers to delicately as “workforce transition”—will face strong opposition from the city’s unions (the largest of which, PROTEC17, has thrown its weight behind Harrell’s opponent Wilson), and potential opposition from the public as well. Replacing public workers with software could also have implications for the local economy, which is increasingly tilted in favor of wealthy tech-sector workers. And, of course, the current frenzy of AI hype could turn out to be just that—hype.

The city’s new AI plan says the “City’s AI Proof of Value framework ensures pilots are judged on clear objectives, business value, responsible use, and long-term supportability, not hype-fueled adoption we hear from sales staff.” Which seems, I don’t know… a little doth-protest-too much?