Tag: employee hours tax

Cops, Crime, criminal justice, homelessness, Mayor Durkan, Morning Crank, public safety, Transportation, zoning

Morning Crank: Reminiscences
File:Seattle Streetcar 301 leaving Pacific Place Station.jpg
Streetcar image by Steve Morgan.

1. Earlier this month, 100 representatives from Seattle neighborhood groups, downtown businesses, and advocacy groups—including the interim director of the Transportation Choices Coalition and the head of the Compass Housing Alliance—wrote a letter to Mayor Jenny Durkan urging her to move forward with the delayed, over-budget downtown streetcar line, which would connect the two existing streetcars (which go from Chinatown to First Hill and from Westlake to South Lake Union) via a “Center City Connector” running on First Avenue downtown. Durkan pressed pause on the project in March,  directing the city to do its own investigation, and hired a consultant to do an outside review of the $200 million project, setting a self-imposed deadline of June 19 that came and went without a report from the consultant. (According to the Seattle Times, the results of the internal review are expected to be released on Friday).

The letter, which urges Durkan to think of all the small minority-and family-owned businesses that would benefit from the streetcar, is in many ways reminiscent of the public pressure that came to bear on Durkan in two other recent debates: The head tax (a $250-per-employee tax on about 500 high-grossing businesses) and the appointment of a new police chief. In both cases, Durkan took a controversial position, then changed her mind. With the head tax, she opposed the version the city council initially proposed, then reversed course to support it after ostensibly getting Amazon on board, then flipped again to oppose it after a coalition of businesses and developers created a campaign to defeat it at the polls. In the case of the police chief, Durkan initially eliminated interim Chief Carmen Best from the running, citing the recommendation of her appointed search committee, whose chairman, Tim Burgess, said the group agreed “it was best at this point for an outsider to be brought in as the next chief.” Yesterday, in a stunning turnaround, Durkan appointed Best, saying by way of explanation that the thing that had changed between Best’s elimination from the running and her appointment as chief was that “she got on the list of three finalists.”

So will Durkan flip-flop on the streetcar as well—approving the over-budget link between two slow, underutilized lines in response to pressure from community groups that argue the streetcar is the best way to provide “much-needed transit access and enhanced mobility” to people traveling through downtown? Look back in this space after Friday, but I wouldn’t be too surprised if the streetcar turns out to be Durkan’s third 180 in as many months.

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2. Late Monday night, the Bellevue City Council approved a process for siting permanent shelters in the city, which is a first step toward the lengthy process of approving a permanent shelter in Bellevue—a process that could still take another several years. Currently, the only shelters in Bellevue are temporary; the land use code amendment adopted Monday creates a land use code designation for a permanent shelter. The arguments for and against the shelter were reminiscent of the debate over shelter in Seattle, writ small—what’s at stake in Bellevue are 100 potential permanent shelter beds, compared to the more than 3,100 shelter beds that currently exist in Seattle.

Among other amendments, the council narrowly rejected a proposal to require a 1,000-foot buffer between the shelter and any residential areas or K-12 schools (the amendment would have also allowed shelters to be located up to one mile away from a transit stop, rather than within a half-mile, which would effectively limit shelters to industrial areas inaccessible by transit. The council also considered, and rejected, the idea of making homeless shelters a temporary, rather than a permanent, use.

The city of Bellevue has been embroiled in debate for years over a proposed men’s shelter in the Eastgate neighborhood, near Bellevue college and a Sound Transit park-and-ride. According to the most recent one-night count of King County’s homeless population, there were at least 393 people living unsheltered in East King County.

Former city council member Kevin Wallace and recently elected council member Jared Nieuwenhaus have suggested that the shelter could be located in an industrial area near Sound Transit’s light rail station in the Bel-Red neighborhood, which would require Sound Transit to create new plans incorporating a shelter into its light rail station. (When he was on the council, Wallace, a developer, frequently tried to delay or alter Sound Transit’s plans to build light rail to Bellevue.)

Council member Jennifer Robertson, an opponent of the changes adopted Monday, claimed she had seen crime statistics that showed that the majority (55 percent) of the property crime in the city of Portland was committed by the 3 percent of its population who are homeless, along with 39 percent of the violent crime. I was unable to track down this statistic; Portland’s crime dashboard, like Seattle’s, does not track crime rates based on a perpetrator’s housing situation.

Deputy mayor Lynnne Robinson, who voted for the land use amendments, said she had never seen a process drag out this long. “We made a commitment to site a permanent men’s shelter, and there [has been] more public process  in this [land use code amendment] than I’ve ever seen in anything else in my five years on the council that we’ve permitted or created a permitting process for,” Robinson said.

The first temporary winter shelter in Bellevue opened in 2008; the city first committed to opening a permanent shelter for men in 2012.

City Council, homelessness, housing, human services, Mayor Durkan, Seattle magazine, Taxes

Employee Hours Tax Passes Over Durkan, Amazon Objections, But Veto Looms

This story originally appeared at Seattle magazine.

With the city council poised to pass a proposed $500-per-employee “head tax” on Seattle’s 600 largest businesses, and Mayor Jenny Durkan equally prepared to veto the proposal in its current form, the question now is: What’s next?

With council members heading into a weekend of negotiations, it’s possible that both sides could emerge on Monday with a compromise solution that splits the difference between the tax that passed on Friday and the “compromise” version that Durkan and council president Bruce Harrell support, which would cut the council’s proposal in half. However, if the two sides fail to reach a compromise, the larger version of the head tax will almost certainly pass on Monday by a 5-4 majority, which is one vote shy of the 6-3 margin supporters need to override a mayoral veto.

In a statement Friday afternoon, Durkan made it clear that she would veto the tax in its current form, but said she still held out hope that the council “will pass a bill that I can sign.” However, Durkan’s ally Harrell, also made it clear on Friday that he would not support a compromise floated by council member Lisa Herbold to lower the tax to $350 per employee, indicating that he and Durkan may not be open to a proposal that merely closes the gap between what Durkan and the council majority want. It’s possible, in other words, that when Durkan says “a bill that I can sign,” she merely means a bill that cuts the tax to $250 per employee—the amount Amazon, which has threatened to stop construction on its Seattle headquarters if the tax passes in its original form, has said they are willing to accept. Amazon contributed $350,000 to a pro-Durkan PAC in last year’s mayoral election.

A quick backgrounder on the tax: Last year, at the end of its annual budget process, the council formed a task force to come up with a progressive tax to pay for housing and services for Seattle’s homeless population. After several months of meetings, and numerous compromises in response to objections from small and low-margin businesses, the task force came up with a plan that would generate about $75 million a year—a $500-per-employee annual tax on businesses with gross revenues above $20 million, a threshold that excludes companies with high gross revenues but tight margins, such as restaurants. The proposal also came with a spending plan that emphasized long-term affordable housing over short-term emergency shelter services, and a provision that would convert the head tax into a business payroll tax starting in 2021, with no sunset date.

On Thursday night, Mayor Durkan released her own “compromise” head-tax proposal, which would cut the recommended head tax in half, to $250 per employee, ditch the provision transitioning the head tax into a business payroll tax, and sunset the whole thing in five years unless the council voted proactively to renew it. On Friday, Harrell introduced a proposal identical to the Durkan plan, along with a spending plan that emphasizes shelter over permanent housing and would pay for just 250 new rental units over five years. The Durkan/Harrell plan also includes a four percent wage increase for social service workers (many of whom make just over $15 an hour) and funding for a second Navigation Team to remove tent encampments and refer their residents to services.

When a council vote is 5 to 4 and a veto hangs in the balance, talk inevitably turns to “swing votes”—that is, who can be swayed to join the council majority to make the bill veto-proof?

Right now, it appears unlikely that anyone in the council’s four-person minority will budge over the weekend to support the full $500 tax, or even Lisa Herbold’s proffered $350 compromise, but a lot can change in the course of two days. So perhaps there will be a compromise that convinces one of the council members who opposes the larger tax to join the council majority. (The opposite scenario—that one of the five members who voted for the original $500 tax will join the four-member minority that wants to cut it in half—seems highly unlikely, since all five council members have consistently supported the proposal that came out of the task force, and since they stand to gain more, politically speaking, by forcing Durkan into a veto fight than by switching sides and handing the mayor a bloodless victory.)

However: If, as seems more likely as of Friday afternoon, the vote remains 5-4, the question becomes what will happen in the 30 days after Durkan vetoes it.

Judging from council members’ past positions and their comments Friday, the most likely “swing vote” when the decision comes down to passing something or doing nothing appears to be council member Rob Johnson, who seemed more tentative in his position than either Debora Juarez (“If we tax jobs to build houses and the jobs leave because of the tax, then no houses get built”) or Sally Bagshaw, who said virtually nothing at Friday’s meeting but is typically not the first council member to make dramatic vote switches.

Last year, when the council was debating whether to include the head tax in the budget, Johnson argued that proponents needed to come up with a more detailed spending plan to justify such a substantial tax. They did exactly that—and Johnson voted instead for a hastily sketched-out proposal that some council members didn’t see for the first time until this morning. On Friday, the most enthusiastic comment Johnson managed to muster about Durkan’s proposal was that it “allows for us to continue that pay-as-you-go process that has been a hallmark of most of the affordable housing investments that we’ve made as a city.”  If tax proponents are looking for a swing vote to help them override Durkan’s veto (and there is precedent for this kind of vote-switching), Johnson may be their best bet.

The council will be in discussions all this weekend, and will meet again on Monday morning to discuss the proposal (and any compromises reached over the next two days). A final vote on the head tax is scheduled for 2:00 Monday in council chambers.

 

Bikes, Business, City Council, City Hall, Democratic Party, gentrification, homelessness, Morning Crank, Taxes

Afternoon Crank: I Don’t Understand the Evidentiary Value

 

Image result for cascade bicycle club

1. For the past week, local right-wing talk show host Dori Monson has been on a jag about Cascade Bicycle Club, accusing the bicycling advocacy group of engaging in “gangland” tactics in their years-long effort to complete the “missing link” of the Burke-Gilman multi-use trail in Ballard. Monson’s evidence for this “gangster” activity? A single email from 2014, sent by Cascade policy director Brock Howell to former executive director Elizabeth Kiker, which reads, in full:

  Tue, 28 Oct 2014 16:23:00 -0700

Re: Josh Brower’s jacket Brock Howell <brock.howell@cascadebicycleclub.org> Elizabeth Kiker <elizabeth.kiker@cascadebicycleclub.org>

I would love to go around the litigation. Our best bet is to get this C.D. Stimson development project funded & built. Once it’s built, the operations of Salmon Bay Sand & Gravel and other light industry will likely have to be limited during evening hours due to noise issues —- especially if the development is a hotel, apartment or condo. Once their operations are impacted, it’s only a matter of time before they sell out and give up the litigation. Also, Brower’s “Plan B” will likely be completed in 2016 during a major maintenance project to Leary Way/Ave. Or, rather, we’ll at least get a road diet with bike lanes on Leary. So, in terms of meeting the needs of bicyclists in Ballard, some of the pressure should be lifted from us, and we can push for a true completion of the Burke-Gilman Trail no matter how long it takes.   In the interim, I’m looking forward to shoulder improvements to Shilshole Ave, which is supposed to go to bid this November (basically 1.5 years late) with construction soon there after.   The Connect Ballard team is working on an end-run-around the anti-business framing by building a business coalition in support of fixing the Missing Link. And Mary & I have talked about using Ballard as an ideal pilot neighborhood for creating Seattle’s first Bike-Friendly Business District.   So lots of good things potentially happening. With 240 Connect Ballard team members, hopefully we can make some things happen quickly.   -Brock

No context is provided for the email, and I was unable to obtain the rest of the email chain. However, here is some context that might help explain why a nearly four-year-old conversation between two people who have long since left Cascade might be surfacing now: After waging battle against the Missing Link for years, a group of business owners, including Salmon Bay Sand and Gravel, are trying to convince the new mayor, Jenny Durkan, to kill the project. The email, which the coalition attached to a letter rejecting a proposed settlement in their ongoing lawsuit against the city. bolsters their argument that bike activists really just want to destroy local businesses.

Absurd as that idea might sound, it’s basically the story the anti-Missing Link coalition’s attorney, Josh Brower, has been peddling for years. In fact, Brower tried to introduce the exact same email as evidence of an anti-business plot last year in a hearing before the city hearing examiner, who rejected the email as irrelevant. Here’s an excerpt from the transcript of that hearing, which begins with city hearing examiner Ryan Vancil expressing skepticism about Brower’s claim that it proves Cascade’s plan is to gentrify Ballard so that industrial businesses won’t be around to complain anymore.

EXAMINER VANCIL: [T]he concept you’re getting at is this land use pressure. We had an expert witness addressing those land use pressures, the tensions between the different land uses that are coming. I’m — I’m not sure how we’re getting at that through this. And we had this discussion when we didn’t admit this — this email. Even if this is an accurate — you know, if I sort of apply, sort of, a summary judgment standard, if — if this is exactly how Cascade feels about this and they would love to see every business gone in Ballard, I don’t see how that’s a land use pressure. It’s the opinion of a — of a nonprofit organization. It — it’s  not a … zoning or land use code pressure that’s coming from a use. And this is a hearing inherently analyzing — we are looking at the  analysis of different land uses and whether it’s adequate or not. So I’m just not — I mean, I get it that this is a good stick in the eye to Cascade but I don’t understand the evidentiary value of it.

MR. BROWER: Sure. And it’s not meant to be a stick in the eye, Mr. Examiner.

EXAMINER VANCIL: It comes across that way  very strongly.

MR. BROWER: Okay.

EXAMINER VANCIL: And, so I’m having a hard time understanding why —

MR. BROWER: Certainly.

EXAMINER VANCIL: — particularly with the limited time we have, how this is something we really want to be spending our time on.   

Brower says he did not provide the email, which was one of “hundreds or thousands” his team obtained through the discovery process, to Monson, his fellow talk-show host Todd Herman (who called Howell to confirm the email), or Safe Seattle, which posted the email in mid-April. Brower says he does not agree with Monson’s characterization of Howell and Cascade as “gangsters,” but adds, “I do believe CBC, Brock and other CBC staff have a very heavy handed and personal-attack approach to their advocacy. When CBC does not get what it wants it resorts to personal attacks, which I think is inappropriate in civil discourse.” Brower went on Monson’s show on Tuesday, where he posited that Cascade is “truly trying to put those [Ballard industrial] businesses out of business.” Although Brower stayed on message and avoided personal attacks, he did not object when Monson accused Cascade of engaging in “gangster stuff,” “raw corruption,” and “collud[ing] with developers to put condos on the waterfront where maritime businesses used to be.”

2. Learn to trust the Crank: At last night’s meeting of the 47th District Democrats, Debra Entenman, a field representative for Congressman Adam Smith, announced that she will be challenging state 47th District Rep. Mark Hargrove, a Republican, this year. Entenman has the support of the House Democratic Campaign Committee, which funds and campaigns for Democratic candidates.

Earlier this week, ousted King County Democrats chair Bailey Stober told the Seattle Times that he was running for the position as an “independent Democrat.” The surprise announcement came just two days before Entenman was expected to announce she was running, and just one week after Stober was forced to resign from his $98,000-a-year job at King County over allegations of sexual harassment and workplace misconduct. (Three separate investigations and a 14-hour “trial” by the King County Democrats’ executive board concluded that Stober was guilty of the vast majority of the charges against him, which also included allegations of financial misconduct.)

The 47th District won’t have its formal endorsement process until later this year, but the district’s chairman, Aaron Schuler, announced that he was removing Stober from his position as sergeant-at-arms for the district, citing the fact that Stober had threatened one of the group’s members via text message and is running for office without the support of his party. (I have seen the text message and can confirm that Stober threatened the recipient if she spoke against him politically.) During the same meeting, another member said she felt threatened by Stober’s supporters during the process that resulted in his resignation. “I felt that I was a potential target,” she said. During a panel discussion later in the meeting, Washington State Democratic Party Chair Tina Podlodowski said she hoped that what happened in the King County party would be “a cautionary tale around the state. … I’ve gotta say, as Democrats, one of our tenets is that we believe women,” Podlodowski continued. “I think we could have done a lot of things better.”

3. The One Table task force, which was charged with coming up with regional solutions for the root causes of homelessness and came back with a plan that included just 5,000 units of housing over the next three years across the entire King County region, was supposed to hold its final meeting today in Auburn. But the long-scheduled meeting was canceled quietly and abruptly earlier this week, and removed from the One Table website with no public notice.  One possible reason for the cancellation: An upcoming vote on the city’s proposed employee hours tax, the outcome of which could dramatically alter the task force’s final recommendations. Yesterday, after Amazon effectively threatened to pick up its toys and leave if Seattle passes the tax, the City Council’s finance committee decided to postpone additional discussion on the proposal, prompting speculation that the council will not hit its own self-imposed mid-May deadline for voting on the tax. The tax is expected to bring in $75 million a year.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

City Council, City Hall, Democratic Party, Diversity, Equity, gender, homelessness, King County, labor, Mayor Durkan, Morning Crank, race, Women

Morning Crank: “Sound Transit Is Not Felt To Be a Safe Workplace”

1. Sound Transit CEO Peter Rogoff escaped serious reprimand on Wednesday for alleged behavior toward agency employees that included looking women up and down and giving them “elevator eyes,” using racially insensitive language, swearing at employees, and using an abrasive style that both the public memo on the investigation into his behavior and King County Executive Dow Constantine described as “East Coast” (whatever that’s supposed to mean). With only Seattle Mayor Jenny Durkan and Seattle City Council member Rob Johnson dissenting (because they believed Rogoff’s punishment was insufficient), the board voted to require Rogoff to create a “leadership development plan” to improve his listening, self-awareness, and relationship building” skills and to  assign a three-member panel, made up of Sound Transit board members, to monitor his progress on the plan for six months.

Durkan skipped the launch of an NHL season ticket drive and the raising of the NHL flag over the Space Needle to be at today’s board meeting, an indication of how seriously she took the charges. Before voting, Durkan read the following statement:

“The issues raised and on which we were briefed led me to believe the conclusion that these [performance] factors cannot be met, and so I will be voting against this motion. I think the facts that we have been briefed on and the conclusions reached by our Counsel demonstrate that Sound Transit is not felt to be a safe workplace for all employees, that they do not feel that they can act without repercussions, and that there are many who feel that their work is not valued. I am also concerned that the statements that were alleged to have been made by the CEO, and the actions that were raised – raised the issue of racial bias and insensitivity, as well as other workplace harassment issues. I do not believe that these issues have been resolved as completely as indicated by Counsel, and that having three Board Members oversee the daily work of this CEO is not the resolution, and so I will be voting against this motion.”

Neither Durkan nor Johnson had any further comment after the meeting.

The memo on the investigation lays out a few specific examples of behaviors that the investigation deemed inappropriate, including a Black History Month event in 2016 at which Rogoff “reportedly made comments condescending toward persons of color” and a 2017 incident in which he dismissively told a female employee, “Honey, that ain’t ever going to happen” in response to a question. But the memo, and most of the Sound Transit board, is also quick to chalk much of Rogoff’s reported behavior up to difficulty navigating the politeness of Pacific Northwest culture and the fact that the previous CEO, Joni Earl, was so beloved that Rogoff faced built-in challenges from the time he was hired, in late 2015. To wit:

In the meeting, King County Executive Dow Constantine, who was chair of the Sound Transit board when Rogoff was hired, said he talked to Rogoff when he applied for the position and “cautioned him that his directness was going to run up against a very different way of interacting  to which we are accustomed here in the Pacific Northwest, and that he was going to have to modify his manner and understand the local culture if we were going to be successful.” Constantine also described Rogoff as “bracingly direct” before praising his effectiveness.

Rogoff echoed Constantine’s complimentary assessment of his style in his own memo responding to the allegations. In the memo, Rogoff acknowledges (using language that reads a bit like a job applicant saying that his worst flaw is his “relentless attention to detail”) that his “directness and unvarnished clarity did not sit well with some staff” and that he was, at times, “overly intense in articulating my expectations for performance.” Rogoff goes on to explicitly deny some of the allegations,” calling some of the claims made during the investigation “misquoted, misunderstood, mischaracterized or false. I don’t yell at people.  I don’t disparage small city mayors and I don’t shove chairs to make a point,” two incidents that were detailed in the documents released today. “I was shocked to read some of the characterizations on this list.”

A document labeled “Peter Rogoff, CEO ST: Note to file” describes some of those alleged incidents. They include: Directing a staffer to tell Seattle Times reporter Mike Lindblom to “go fuck himself”; yelling over the phone at a staffer in a conversation that lasted from 11pm to 1am; standing up at a meeting and saying “When I give direction, it’s for action, not rumination” and shoving a chair; saying that he “couldn’t give a flying fuck about how things were when Joni [Earl] was here, because she’s not here anymore”; using the term “flying fuck” constantly “to everyone”; and the aforementioned incidents in which he allegedly looked women up and down and gave them “elevator eyes.”

King County Council member and Sound Transit board member Claudia Balducci said after the meeting that she has “seen a lot of improvement” in Rogoff’s behavior. “I think that at least shows that it’s possible, and therefore that we could have a successful CEO. If he can manage people with respect and dignity then I felt he deserves the opportunity.” Balducci disagreed that Rogoff’s management style could be explained away by “regional” differences. “I’m from New York,” she said, and “I think everybody, no matter where they’re from, knows how to be respectful. The things that we were talking about were more than just style.”

Although Rogoff did not receive a bonus this year, he did receive a five percent cost of living adjustment, which puts his salary at just over $328,000.

2. The city’s progressive revenue task force held its final meeting on Wednesday morning, adopting a report (final version to come) that recommends new taxes that could bring in as much as $150 million a year for housing and services for homeless and low-income people in Seattle. Half of that total, $75 million, would come from some version of an employee hours tax; the variables include what size business will pay the tax ($8 million vs. $10 million in gross revenues), the tax rate and whether it will be a flat per-employee fee or a percentage of revenues; and whether businesses that don’t hit the threshold for the tax will have to pay a so-called “skin in the game” fee for doing business in the city. The task force also talked about making the tax graduated based on employer size, but noted that such a tax may not be legal and would almost certainly be subject to immediate legal challenges.

The original memo on the head tax proposals suggests that the “skin in the game” fee should be $200 and that the fee would kick in once a business makes gross revenues—not net profits—of $500,000. During the conversation Wednesday morning, some task force members floated the idea of lowering that threshold to just $100,000, a level that would require many small businesses, such as street-level retailers, to pay the fee, regardless of what their actual profit margins are. However, after council member and task force chair Lorena Gonzalez pointed out that the city has not done a racial equity analysis to see how any of the head tax proposals would impact minority business owners, the group decided to keep the trigger at $500,000 in gross revenues. Additionally, they decided to raise the recommended fee to $395—a number that was thrown out, seemingly at random, by a task force member who called it “psychological pricing” (on the theory that $395 feels like significantly less than $400).

The other $75 million would come, in theory, from a combination of other taxes, some of them untested in Seattle and likely to face legal challenges, including a local excise tax, an excess compensation tax, a tax on “speculative real estate investment activity,” and an increase in the real estate excise tax. Legal challenges could delay implementation of new taxes months or years, and—although no one brought it up at yesterday’s meeting—REET revenues always take a nosedive during economic downturns, making them a fairly volatile revenue source.

3. The Teamsters Local 174 confirmed yesterday that they will no longer allow the King County Democrats to hold meetings at their building in Tukwila, after a contentious meeting Tuesday night that lasted until nearly midnight. My report on that meeting, at which the group decided to extend and expand the investigation into sexual harassment and financial misconduct claims against the group’s chairman, Bailey Stober, is here.

According to Teamsters senior business agent Tim Allen, the decision wasn’t directly related to the allegations against Stober, but had to do with the behavior of some of the group’s members and their treatment of a custodial worker who had to clean up after the group, who may have been drinking alcohol on the premises. “We have standards of conduct that people are supposed to live up to” around how guests treat the building and whether they “treat our [staffers] properly,” Allen said. “They had the whole building to clean, and usually we expect [groups that use the building] to clean up after themselves. Stober, contacted by email, said “I’ve heard varying degrees of that story” (that people were drinking, continued to do so after they were asked to stop, and left a mess), “but I can’t confirm that because I was sitting in the front of the room and have no knowledge of what was happening outside of the room.” Many other local progressive groups, including some legislative Democratic groups, have alcohol at their meetings (many provide beer or wine for a suggested donation), but some venues do not allow alcohol without a banquet license.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

Affordability, City Council, Density, Development, homelessness, housing, Mayor Durkan, Morning Crank, neighborhoods

Morning Crank: To Think Otherwise is Really Idealistic

1. Council members expressed concern and some skepticism Wednesday at a committee discussion of Mayor Jenny Durkan’s plan to spend around $7 million in proceeds from the sale of a city-owned piece of property in South Lake Union on “tiny house” encampments and housing vouchers—so much concern and skepticism, in fact, that they decided to put off a decision on the tiny houses until mid-March, and could end up tabling the voucher program  as well.

Durkan’s proposal, called “Building a Bridge to Housing for All,” includes two one-time expenditures on homeless shelters and homeless prevention. The shelter funding, about $5.25 million, will initially be used to open a single “tiny house village” for chronically homeless women, but could ultimately be used to add as many as 10 new authorized encampments with a total of 500 tiny houses, across the city. According to city council staffer Alan Lee, each tiny house would cost about $10,500, a number that includes on-site security and 24/7 case management for residents (according to council staff, case management and other operating expenses for 500 tiny houses would cost the city about $500,000 a year.) Durkan has convened an “interdepartmental housing strategy” group to come up with a final proposal in June; Lee said at yesterday’s meeting that the numbers were intended to “give a very rough framework of what direction this money could go… whether or not that’s the strategy that comes out in June.” But it’s hardly going out on a limb to suggest that the strategy that comes out in June will include a heavy emphasis on tiny-house encampments;  Durkan even held her press conference announcing the Bridge to Housing program at the Seattle Vocational Institute, with two under-construction tiny housesas her backdrop.

The council’s finance committee agreed to hold off on the $5 million for a few weeks and vote on it, at the earliest, at the full council meeting on March 12. Meanwhile, they decided to move forward with the plan to spend $2 million on short-term housing assistance vouchers for a small number of people on the Seattle Housing Authority’s waiting list for federal Section 8 housing vouchers, which recipients use to rent housing on the private market. (Or not—although landlords aren’t allowed to discriminate against people who use Section 8 vouchers to pay their rent, it can be hard to find housing that fits the program criteria, including a maximum monthly rent of around $1,200 for a one-bedroom apartment in the Seattle area.) The assistance, which staffers estimated would work out to about $7,300 per household per year (about half that $1,200 maximum), would help just 150 of the 3,500 or so on the SHA waiting list for vouchers—those who make less than half the area median income and are at high risk of becoming homeless. (My earlier estimate, which worked out to a much lower per-month subsidy, was based on the assumption that the city planned to help 15 percent of those on the SHA waiting list, rather than 15 percent of a smaller subset of 1,000 wait-listed people in need of housing. The fact that the city’s estimates for monthly subsidies are higher reflects the fact that the $2 million it plans to spend will only help a relatively small number of people.)

Quite a few council members questioned the wisdom of moving forward with a housing assistance program without identifying a long-term funding source (the $2 million is a one-time windfall from the sale of city property), and some wondered whether the city should be spending its limited resources on people who aren’t actually homeless, instead of, say, the 536 people on SHA’s waiting list who are either actually homeless or unstably housed.

“What I’m concerned about,” council member Lorena Gonzalez said, addressing staff for the mayor’s office and SHA, “is that we’ve identified a gap in the system and are proposing to address that gap in the system in a short-term fashion with a finite amount of resources. … I guess I don’t have a level of confidence that in two years, we will have patched the gap in the system that you have identified. So if that gap still exists, then there will be an expectation created” that the city will continue to fund the program, even though the money has all been spent. To think otherwise, Gonzalez added pointedly, is “really idealistic.”

It’s unclear what the council will do next Tuesday. Of seven council members at the table, four—Gonzalez, Lisa Herbold, Teresa Mosqueda, and Mike O’Brien—abstained from voting to move the allocation of the $2 million (part of an ordinance meant to accompany a separate bill authorizing the sale of the property for a total of $11 million) onto next Tuesday’s full council agenda. Because abstentions aren’t “no” votes, the measure passed, with Bruce Harrell, Sally Bagshaw, and Rob Johnson voting “yes.”

2. The progressive revenue task force, which has been meeting for the past two months after the failure of a proposed employee hours tax, or “head tax,” last year, will hold its final meeting at 9am on March 1 in the Bertha Knight Landes Room at City Hall. The group is expected to propose a new version of the EHT rejected by the council during last year’s budget process, which would have required businesses with more than $10 million in gross receipts to pay an annual tax of $125 per employee. The task force held its penultimate meeting yesterday morning.

3. ICYMI: Thanks to the marvels of modern technology, I was able to watch two simultaneous committee hearings—a meeting of the council’s planning, land use, and zoning (PLUZ) committee, to take comment on the city’s plans to upzone and require affordable housing in Northeast Seattle’s District Four, and a public hearing/rally against cuts to homeless shelters the city made last year—online. For about three hours, I whiplashed between a barrage of testimony against shelter cuts by council member Sawant’s army of invited supporters (as usual, she advertised her hearing with a “PACK CITY HALL!” invitation, turning what was ostensibly a council committee hearing into a standard Sawant protest rally) and public comments on zoning changes that ranged from earnest (the upzone, one speaker said, will allow “more neighbors to share the amenities” she already enjoys) to entitled (“I choose to live in Seattle,” a Wallingford homeowner said. “I like it. Other people want to live in Seattle too, and they want to take my spot”) to ridiculous (“It seems the department of planning has specifically targeted Wallingford for destruction of neighborhood character.”) If you missed the opportunity to follow along in real time (or if you just want to relive the whiplash) I’ve gathered my tweets in a Twitter Moment.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

Affordability, Health, homelessness, housing, human services, King County, Mayor Durkan, Poverty

Morning Crank: I Don’t Want That Rumor to Be Perpetuated

1. Sitting at the year’s first meeting of the Progressive Revenue task force Thursday morning, it was hard not to flash back to a press conference the previous day, when Mayor Jenny Durkan announced that the city would spend some of the $11 million it expects to receive from the sale of a city-owned property in South Lake Union (a different property than the “teardrop” site council members discussed as part of their budget deliberations last year). At that briefing, held in front of two “tiny houses” under construction at the Seattle Vocational Institute, Durkan said it would take time to build all the housing that will ultimately be funded by the $290 million 2016 housing levy, and that in the meantime, a $5.5 million investment in “bridge housing”—or, in the clunky title Durkan chose for the initiative, “building a bridge to housing for all”—would give people living on the street slightly better options. “In an ideal world, we would not need to be building tiny houses,” Durkan said. Then she acknowledged that state and federal support for affordable housing is about to fall off a cliff.

The rest of the money would pay for rental assistance for people on SHA’s Section 8 voucher waiting list—”we’re going to focus on the people who need that assistance the most,” Durkan said— design of a new fire station, and city expenses related to the land sale. The developer buying the property would also provide $2 million of a total $7.7 million payment toward affordable housing projects elsewhere, required as part of the city’s Mandatory Housing Affordability program, to build actual affordable housing.

The reason I was thinking about Durkan’s announcement Thursday morning is that it was basically a rounding error—what government staffers sometimes call “budget dust”— in the funding needed to actually address the city’s homelessness problem, which has been growing every year since at least 2013. According to task force co-chair Kirsten Harris-Talley, if every unit of affordable housing requires $160,000 in capital expenditures from the city (more on how advocates for a higher employee hours tax arrived at that number in a minute), and the city will need around 20,000 new units for very low-income people in the next 10 years, that means the city will need to spend around $3.2 billion over that time. As you can probably imagine, the city isn’t spending anywhere close to that right now—according to the presentation, the city spent just under $95 million from all sources on capital housing investments last year. At that rate, it would take more than 33 years to come up with $3.2 billion (and that’s assuming housing costs stayed flat).

Obviously, none of this is an exact science. The $160,000 figure is an estimate provided by council member Kshama Sawant’s office, of what the city would need to contribute if it ramped up its affordable housing production and was unable to find a significant amount of new funding from other sources to help pay for all the new units. (Currently, each new unit costs the city about $93,000 in capital costs, but the programs that pay for the difference between the city’s contribution and the total cost to build a new unit, about $311,000, are only committed to a certain number of units, requiring the city—theoretically—to pay more for each additional unit out of its own pockets.)

If Harris-Talley and Sawant’s figures are correct, that provides a ready-made argument for the employee hours tax (effectively a flat annual tax for each full-time employee on every business over a certain revenue threshold) that they’ve wanted to pass all along. Today, the task force looked at potential revenues from the so-called head tax at different levels and with different sizes of business exempt from the tax, which I’ve copied below. (Last year’s proposed head tax would have exempted businesses with less than $10 million in gross revenues, up from $5 million in the initial proposal; some businesses argued that basing the tax on gross revenues was unfair because it didn’t take into account thin profit margins in certain industries, like restaurants.)

If the city goes through a recession, of course, the amount it can expect to collect will shrink. However, recessions tend to actually lower rents; Downtown Emergency Service Center director and task force member Daniel Malone pointed out that during the last recession, the county’s annual point in time count of people living outdoors tends to stagnate or even decrease, as it did between 2010 and 2011, and between 2011 and 2012. That’s one of the paradoxes of a weakening economy: Although revenues from taxes that are less stable, like direct taxes on businesses, tend to decline, so do rents, making it possible for some people forced onto the street by an impossible housing market to actually find a place to live.

2. In a King County Board of Health discussion about the possibility of a Hepatitis A outbreak in Seattle yesterday (a nationwide outbreak, ongoing now, began in California and was widely blamed on lack of access to handwashing facilities for the state’s homeless population), King County Health Department Director Patty Hayes expressed concern about the city’s decision last year to cut funding for three downtown hygiene centers that provide restrooms, showers, and handwashing and laundry facilities for homeless people living and moving through downtown.

City council and Board of Health member Sally Bagshaw—a vocal proponent for cutting funding to the facilities as part of the city’s new “performance-based” approach to homeless service contracts—objected to Hayes’ characterization of the problem.

“I think that [problem with the closure of the hygiene centers] is more apparent than real,” Bagshaw said. “We’re putting huge investments into new 24/7 shelters …  I’m working with those 24-hours shelters to say, ‘Can you open these up for people who aren’t [staying] here tonight” to take showers, she said. “We opened up community centers [for people to shower]. There are more facilities open now than before. It’s just that the money’s being shifted. I don’t want that rumor to be perpetuated. There were some organizations that didn’t get funded” because the city went to a competitive process, Bagshaw said.

I covered the cuts to funding for hygiene centers, and the reason some advocates believe community centers and shelters are not an adequate substitute for public restrooms and dedicated hygiene facilities, here.

3. The Sightline Institute, a progressive think tank that researches and covers of housing, transportation, and environmental policy from a green, pro-transit, pro-housing perspective, just brought on a new (unpaid) fellow to cover “issues of infrastructure, technology and energy with a view towards sustainability.” His name: Daniel Malarkey.

If that name sounds familiar, it should. (If it doesn’t, you weren’t following Seattle politics in the early 2000s.) He was the finance director for the Seattle Monorail Project, the transportation agency that was going to build a monorail line from Ballard to downtown to West Seattle. That project was doomed to failure after Malarkey’s revenue projections overshot the mark by about 50 percent, and after the agency compounded the problem by trying to paper over the error. (The error Malarkey made was counting revenues from taxes on every single car in Seattle, when in reality, thanks to heavy lobbying from the auto industry, all new cars and cars brought to the city by people moving here from out of state were exempt from the monorail tax. The result was that Malarkey overestimated the monorail’s tax base by a third) When he resigned at the end of 2003, I wrote this. Interestingly, it looks like his three years consulting or working directly for the monorail agency aren’t on his official Sightline bio.

Anyway, it looks like he’ll be writing about autonomous cars.

Full disclosure: I have written several pieces for Sightline and often use their research in my reporting.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

City Council, City Hall, homelessness, housing, human services

After Defeat of Head Tax, Council Scrambles for Plan B

City council budget committee chair Lisa Herbold made a risky gamble this week, and she lost. As a result, the council will pass a budget this coming Monday whose details were thrown together largely at the last minute, after a budget proposal that hinged on the passage of the controversial employee hours tax failed to secure a majority.

The gamble Herbold took was fairly straightforward, First, she proposed a version of the budget that incorporated revenues from the head tax—a $125-per-employee tax on businesses with more than $10 million in gross receipts, known as the HOMES tax. Second, she made sure that city council members’ top-priority projects would be on the chopping block without the tax, so that any council member who voted against the tax would risk losing funding for her favorite projects. Third, instead of coming up with a backup plan in collaboration with head tax opponents, she crafted a “Plan B” that included draconian cuts to council members’ priorities (including the criminal justice diversion program LEAD, housing for homeless Native Americans, and trash removal at homeless encampments), giving them an additional incentive to vote “yes” on the tax.

The problem was with step 4—the one where a majority of council members were supposed to fall in line and support the tax. That didn’t happen, for a number of reasons. First, some council members were simply dead set against passing the tax, or—to hear council members like Lorena Gonzalez tell it—opposed to passing it on a rushed timeline without an opportunity to do deeper analysis and look at other alternative revenue sources. (Council members have had less than three weeks to consider the proposal.) Second, several council members bristled at the way Herbold’s initial balancing package, in council member Debora Juarez’s words, “held hostage” so many important projects by putting them “in the head tax parking lot.” Juarez, in particular, was indignant about this forced tradeoff. And third, potentially persuadable council members may have been put off by the behavior of the head-tax supporters who showed up, many at Sawant’s behest, day after day, screaming invectives (“Shame!” “Their deaths are on your hands!” “Republican!”) at council members who didn’t fall in lockstep behind the proposal.

After the tax failed, it became clear that Herbold didn’t have a backup, and the council ended up canceling a scheduled budget meeting to hammer one out. The result was that the process that led to a final budget package was disorganized and chaotic, with some council members reportedly in the dark about budget amendments until less than an hour before they had to vote them up or down. (Many amendments weren’t available in hard-copy form until minutes before they were voted on.)

A few things stand out about the substance of the budget package that will go before the council on Monday. First, it includes aggressive cuts to incoming mayor Jenny Durkan’s budget. If the budget passes unchanged on Monday, the city’s first female mayor in nearly a century will have to reduce her budget 17 percent, the equivalent of five mayoral staffers. (This was one of the budget amendments that reportedly came through at the last minute). Much of the money that would have gone to the mayor’s office will now fund new contract management positions in the Human Services Department.

Council members who supported cutting the mayor’s budget, including Mike O’Brien, said they were merely bringing it down to the “baseline” level established under former mayor Mike McGinn. However, that characterization is misleading: McGinn had a skeleton staff because he became mayor during the worst economic recession in recent memory, and made the cut at a time when the city faced ongoing annual revenue shortfalls in the tens of millions. As the economy recovered and all city departments expanded back to pre-recession levels, McGinn’s successor, Ed Murray, staffed up too. While budget cuts during recessions are standard, I can recall no recent precedent for slashing the mayor’s budget so dramatically in the middle of an economic boom. Notably, the council did not propose any cuts to its own staff budget, which council members increased by 33 percent just last year.

Outgoing mayor Tim Burgess fired off a sassy response to the council’s cuts, saying that if the council, “in their wisdom[,] believes these funds are needed for other purposes, and remembering that the Legislative Department’s budget is twice the size of the Mayor’s budget, then the funds should come proportionately from the Mayor’s Office and the Legislative Department.” Should Durkan want to respond to the cuts more directly than Burgess did, she could take a hard look at the dozens of statements of legislative intent the council also adopted today, each of which constitutes a request for the mayor’s office to craft legislation or produce reports and analysis. Or the council could decide to dial back the cuts on its own; they still have until Monday to find cuts elsewhere if they don’t want to pick this fight with the new administration. Durkan, it’s worth noting, did quite well in several council members’ districts, including O’Brien’s (Northwest Seattle) and Herbold’s (West Seattle). Both council members are up for reelection in two years.

The cuts to Durkan’s office highlight another unusual aspect of today’s budget proposal: It shifts a significant amount of money into the city’s Human Services Department from other departments, primarily the Department of Finance and Administrative Services. Although intuitively, it makes sense to move funding for things like homeless encampment removals to the department that hands out contracts for homeless services, HSD was not necessarily clamoring for the change, and will need time to hire seven new employees and train them to do the work FAS has been doing. Durkan, meanwhile, presumably has her own ideas about how the department should be run, and who should run it (the current director is Catherine Lester).

Today’s budget debate also solidified the ideological fault lines on the council—and highlighted the need for someone to serve as de facto council leader. As budget chair and a council veteran (before her election in 2015, Herbold was a staffer for former council member Nick Licata for 17 years), Herbold had a chance to be that leader, by counting votes and dealing with both sides to come up with a best-case scenario for the council’s left wing as well as a viable Plan B that could win the support of a council majority. Instead, Herbold went for broke—proposing a budget that was, in essence, an ultimatum, and declining to work with council moderates like Rob Johnson on a backup plan. That gamble didn’t pay off, even with a reliable ally like Kirsten Harris-Talley temporarily on the council. Once the council equation shifts in November (when Teresa Mosqueda, who handily defeated Herbold-endorsed socialist Jon Grant, replaces Harris-Talley), she could find herself increasingly isolated—insufficiently socialist for Sawant (whose supporters yelled “Shame!” and “Republican!” as fervently at Herbold as they did at Johnson), insufficiently “moderate,” (which is to say, conventionally liberal) for the council’s new majority.

I’ll have more to say about the final budget package on Monday.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the substantial time I put into reporting and writing for this blog and on social media, as well as costs like transportation, phone bills, electronics, website maintenance, and other expenses associated with my reporting. Thank you for reading, and I’m truly grateful for your support.

City Council, homelessness, housing, Poverty

Is the “Head Tax” Half-Baked—or Long Overdue?

A plan to tax businesses with gross receipts above $5 million to pay for homeless housing and services faced intense scrutiny from several skeptical city council members yesterday at the first budget briefing since council members Mike O’Brien and Kirsten Harris-Talley first floated the HOMES (Housing, Outreach and Mass-Entry Shelter) Act last week. (The proposal would resurrect the so-called “head tax,” a tax for each hour an employee works, that was repealed in 2009). Council member Rob Johnson called the proposal a “false choice” between a head tax and doing nothing, and council president Bruce Harrell took umbrage with council member Kshama Sawant’s suggestion that council members who oppose the head tax are “beholden to the Chamber of Commerce.” After the meeting, Johnson told me that his goal is “to stay focused on the outcomes” and figure out how much money service providers need first, rather than to “reverse engineer” a set of solutions based on a specific revenue source like the head tax.

So far, the proposal comes with a big number—$24 million a year—but few details. Here’s what we do know: The HOMES Act would impose a 4.8-cent tax on every hour worked by employees for companies with gross receipts of $5 million or more. The math works out to about $100 per employee, per year, and the council members estimate it will raise about $24 million annually, which would include $5 million for shelters, new authorized encampments, and safe lots for people living in cars and RVs; $18 million for new housing construction and long-term housing vouchers for people with very little to no income; and $1 million to expand the Law Enforcement Assisted Diversion program, a pre-arrest diversion program for low-level drug offenders, into the North Precinct. The number of new units the package could build depends on whether the city can rely on state subsidies through the housing trust fund, which cut the cost of construction dramatically, but O’Brien estimates the measure could permanently house 1,000 people over the next ten years.

The Seattle Chamber of Commerce and the Downtown Seattle Association condemned the proposal, calling it a “tax on jobs” that sends a hostile message to businesses hoping to expand or move here. (Amazon came up a lot in the initial press coverage of the proposal, but the tax would actually affect about 2,200 businesses, not just so-called big corporations) O’Brien calls that a false narrative; he says the tax represents a tiny fraction of the cost of doing business—”0.3 percent of your labor cost if you pay your workers $15 an hour”—and that if business groups had a better idea, they would have proposed it by now. “We’ve been dancing around this for years— they hate [the head tax], but they haven’t come up with anything better,” O’Brien says. “It’s the only business tax we have access to, and so there’s a question: Do they hate it because they would like a different business tax better, or do they hate it because they hate business taxes, and this is the one we’re going for, so they hate this one?”

DSA president Jon Scholes insists the downtown business group doesn’t just reflexively “hate” all business taxes; what they hate, he says, is being left out of the loop. Case in point: Scholes says O’Brien contacted him on Thursday to let the DSA know that he was “exploring” the idea of resurrecting the head tax; less than 24 hours later, O’Brien was calling a press conference to announce his plan. The move blindsided the business community, Scholes says. “This was not developed with the input of [O’Brien’s] colleagues on the council or other folks who care deeply about this issue,” Scholes says. “We’re not saying that there shouldn’t be new resources, but we think the resources that are going to go to this issue should be thoughtful and discussed out in the open, not decided behind closed doors and foisted upon businesses and the community.”

Seattle’s business community is unusually progressive by business-community standards—the DSA, for example, was a critical partner in making LEAD a reality, back when there was widespread skepticism about any program that would allow drug offenders to go free. Could the council risk losing business support for progressive ideas like LEAD if it alienates them by imposing taxes they hate? Council member Harris-Talley says she doubts it. “I am hard-pressed to think that the businesses that are in our community are going to set aside their values to have a pissing match with elected officials who want to find resources for solutions” to homelessness, Harris-Talley says. “They know it impacts their bottom line” to allow homelessness to get worse, she adds.

The tax, if it passes, will be based on businesses’ gross receipts, not their net profits, which business groups argue could penalize companies that have thin profit margins and create a perverse incentive for businesses to pay their workers less or avoiding growing past the $5 million threshold. (To get a sense of what businesses would be impacted, they include groups of restaurants, like those owned by Ethan Stowell and Tom Douglas, but not individual Subway franchises or your local dry cleaner.) “Five million in gross revenues—there’s going to be a lot of people wrapped into that,” Scholes says. “Let’s say you’re a business making $4.5 million. If you grow the business [above $5 million], you get to pay tax to the city because you created jobs.”

O’Brien says he’s open to other revenue alternatives, if the business community will help him come up with some. “If we can come up with something better in the next few months, I’m happy to change my support to something better and undo this,” O’Brien says. However, he isn’t willing to shuffle around existing funding for homeless services and hope a new spending scheme will make the numbers pencil out. “Historically, four percent of people in shelters have exited to permanent housing, and to get that number to 40 percent [without additional revenue] is ludicrous. The challenge isn’t that we have a bunch of affordable housing that we’re not using—it’s that there’s nowhere to put them.”