Tag: JumpStart tax

Lawmakers Propose Homeless Worker Stipend; Harrell’s State of the City Previews Potential Budget Battle

1. To support homeless service providers struggling with staffing shortages, Sen. Joe Nguyen (D-34, White Center) and Rep. Nicole Macri (D-43, Seattle) are hoping to add $78 million to the state budget to provide $2,000 stipends to thousands of homeless service workers across the state. The program would start in October.

Washington Low Income Housing Alliance policy and advocacy director Michele Thomas said many homeless service workers earn such low wages, “they are one step away from homelessness themselves.” Nonprofits that provide services and shelter to people experiencing homelessness are perennially underfunded, and often have trouble recruiting and retaining staff.

“Our permanent supportive housing providers and our homeless service providers are saying they’re literally competing with fast-food employers and their workers are leaving because [fast food jobs have] similar benefits, similar pay, and a lot less trauma,” Thomas said.

Nguyen said “we as a government have failed” because the state is relying on nonprofit homeless service providers and their underpaid workforce “to do the work that government should have been doing.”

In the House, 27 representatives, including half a dozen from Seattle, signed a letter urging the Appropriations Committee to include the request in the 2022 operating budget. Nguyen said the budget request has support in the senate as well, although he adds that “$78 million is a lot” to ask when there are so many competing budget priorities.

The House Appropriations Committee and the Senate Ways and Means Committee will release their 2022 operating budgets next week.

2. In his first  State of the City Address Tuesday, Mayor Bruce Harrell reiterated his commitment to hiring more police officers and removing more homeless encampments from public spaces; described work to consolidate various systems for reporting encampments and tracking outreach and services to homeless people; and promised to be “the administration that ends the federal consent decree over SPD.” The consent decree is a 10-year-old agreement giving the US Justice Department oversight of SPD’s efforts to correct patterns of excessive force and racially biased policing. “The time to build this [police] department is now,” Harrell said.

As he has during the first month and a half of his term, Harrell emphasized the need to address public disorder that, he said, is destroying small businesses or driving them out of Seattle.

“The truth is, the status quo is unacceptable—that is the one where we must all agree,” Harrell said.

Harrell teased a “major announcement” that will happen later this week on homelessness; as we reported last week, this announcement will include a large, one-time philanthropic donation to fund a “peer navigator” program within the King County Regional Homelessness Authority. Peer navigators are case managers with lived experience who connect people to shelter, health care, and other services; the city, which provides most of the authority’s funding declined to fund a $7.6 million peer navigator pilot last year.

“Yesterday we received some good news, learning that revenue from the JumpStart Payroll Expense Tax has come in $31 million higher than expected,” Harrell said. “That additional revenue must go toward alleviating the budget issues we expect in 2023.”

In a preview of a potential budget battle later this year, Harrell said the city is facing a $150 million revenue shortfall that he plans to fill with revenues from the JumpStart payroll tax, which is earmarked for housing, small businesses, and Green New Deal programs. Former mayor Jenny Durkan attempted repeatedly, and unsuccessfully, to use revenues from the tax (which she opposed), to fund her own budget priorities. She also tried to pass legislation that would allow the city to use JumpStart revenues for virtually any purpose, effectively overturning the adopted spending plan.

“Yesterday we received some good news, learning that revenue from the JumpStart Payroll Expense Tax has come in $31 million higher than expected,” Harrell said. “That additional revenue must go toward alleviating the budget issues we expect in 2023.”

For two years, the revenues from the payroll tax have largely gone into COVID relief. Council budget chair Teresa Mosqueda, who sponsored the tax, told PubliCola, “We have a codified JumpStart spend plan in law for a reason. … It should also be noted that were it not for JumpStart in 2020, we would have faced an austerity budget. In 2022 and beyond, funding is dedicated to the areas noted in the codified spend plan which will create a more resilient and equitable economy.”

Asked if the mayor plans to use JumpStart revenues to backfill the general fund shortfall this year, Harrell spokesman Jamie Housen said, “The Mayor’s Office has been regularly engaging with [Councilmember] Mosqueda on budget issues and are looking forward to working with her and Councilmembers regarding how to allocate the new revenues just identified yesterday.”

Mosqueda said the city should consider new revenue sources to make the city budget sustainable, rather than using payroll tax revenues to fill holes in the budget. “We have to remember, while Jumpstart first revenue returns are in, our commitments to the community members who supported the Jumpstart tax and the detailed spend plan have yet to be realized,” she said. Harrell mentioned the possibility of new taxes in his speech, saying the city would “need to look at all our options, deciding between one-time and ongoing commitments, adjusting expenditures, revisiting existing funding sources, and looking at options for increasing revenues.”

—Leo Brine, Erica C. Barnett

Durkan Budget Would Gut JumpStart Spending Plan, Increase Funding for Encampment Response

By Erica C. Barnett

Mayor Jenny Durkan released the final budget of her term yesterday, outlining the proposal at a very high level in a six-minute speech from North Seattle College. In the coming weeks, the proposal will be debated, analyzed, and rewritten by the Seattle City Council (the addition of 35 net new police officers is an obvious target for their red pens), and PubliCola will be covering every aspect of those upcoming discussions. For now, though, here are a few initial notes on the plan, which reflects better-than-expected revenues and incorporates a lot of ongoing federal funding for COVID relief.

• The budget proposes taking $148 million from the city’s payroll tax fund, a repository for revenues from the JumpStart payroll tax, and moving it into the general fund to pay for Durkan’s other priorities. Legislation the mayor will transmit to the council would also empower future mayors to use JumpStart revenues for virtually any purpose, including the “[m]aintenance of existing essential City services.” The mayor’s proposal would remove language from existing law stipulating that the tax can’t be used to “supplant existing funding from any City fund or revenue source.”

The council adopted the payroll tax specifically to fund programs addressing housing, homelessness, and equity, and created a separate fund for JumpStart revenues with the intention that they couldn’t be used for other purposes—which is precisely what Durkan is proposing to do.

“The proposed changes are necessary in order to reconcile the priorities identified in [the JumpStart bill] with Council actions in support of other critical funding needs, including homelessness, community safety, BIPOC investments, domestic violence prevention and victim services, appropriate compensation for City employees, and the ongoing shortfall in some City revenues,” the mayor’s budget proposal says.

The city estimates that JumpStart will bring in about $235 million next year, so Durkan’s plan would use up the majority of JumpStart funding for non-JumpStart purposes.

Durkan attempted to reallocate JumpStart revenues last year as well.

A summary of the bill by the City Budget Office notes that Durkan didn’t sign the JumpStart bill, “expressing many of the same concerns about earmarking certain revenue streams at a time when the City was making significant investments using one-time funding received from the federal government as a response to the COVID-19 public health emergency.” She also vetoed legislation last year that used JumpStart revenues to fund COVID relief, a veto the council narrowly overturned.

The city estimates that JumpStart will bring in about $235 million next year, so Durkan’s plan would use up the majority of JumpStart funding for non-JumpStart purposes. The budget would use one-time federal emergency dollars to backfill the gap in the JumpStart fund, but because those funds only last one year, the budget creates a future funding cliff for the next mayor and council. If the council adopts this plan, it will have to either cut the programs Durkan funded using a tax meant for other purposes, or continue to dip into JumpStart revenues while cutting back on programs funded this year with one-time funds. It seems unlikely that the council will allow this part of the budget proposal to stand as is.

This is hardly the first time Durkan has proposed dipping into funds earmarked by legislation for a specific purpose in order to fund her own unrelated priorities. In 2018, she started using funds from the sweetened beverage tax—a tax that was supposed to fund healthy food programs in areas most impacted by the tax—to pay for programs that had historically been funded through the city’s general fund, creating “extra” money for her office to allocate elsewhere.

Mayoral spokeswoman Kamaria Hightower said the higher-than-expected contribution to the regional homelessness authority “represents increased spending on homelessness projected 2022. The [agreement] was written in 2019 and did not contemplate the pandemic or the massive infusion of funds to help our most vulnerable neighbors stay safe.”

When the council attempted to reverse this sleight-of-hand and use the tax revenues for their designated purpose, Durkan accused them of “cutting” programs that she was using the tax to fund, setting off a nasty battle that resulted in the council creating a designated fund for soda tax revenues—much like the designated JumpStart fund.

• Durkan wants to add another 35 (net) new police officers to the force—a fairly modest goal, but one directly in conflict with many council members’ stated commitment to reduce the size of the police department and invest the savings into community-based public safety alternatives. Last year, Durkan vetoed the entire city budget because the council amended it to reduce the size of the police force, a veto the council subsequently overturned.

Although the budget proposal includes funding for new and continued alternatives to policing and police response, such as Health One and Triage One, and funding for the Regional Peacekeepers Collective, a gun-violence prevention program, it also commits to “restoring SPD staffing to previous levels” by hiring new officers. To that end, Durkan’s budget also includes $1.1 million to pay for hiring incentives for new recruits and officers who make lateral transfers from other departments.

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The city council just rejected a series of proposals from Councilmember Alex Pedersen that would have set aside as much as $3 million to retain existing officers and recruit new ones to the department.

• The budget proposes sending more money than the city originally agreed to provide—$104.2 million, compared to $75 million the city agreed to provide in the interlocal agreement adopted in 2019—to the King County Regional Homelessness Authority, which is supposed to take over (almost) all the homelessness programs previously managed by the city at the end of this year. The homelessness authority is funded by the city and King County; suburban cities, which hold three seats on the authority’s governing board, don’t contribute financially to the authority.

Mayoral spokeswoman Kamaria Hightower said the higher-than-expected contribution “represents increased spending on homelessness projected 2022. The [agreement] was written in 2019 and did not contemplate the pandemic or the massive infusion of funds to help our most vulnerable neighbors stay safe.”

The new funds include $2.4 million in state and local funds for “tiny home villages,” coincidentally the same amount of state and local dollars the council has been trying to get the mayor to release to pay for three new tiny house villages this year. The mayor’s proposed $2.4 million would pay for ongoing “operations, maintenance, and services s for three tiny home villages (estimated 120 units) or other noncongregate emergency shelter or temporary housing options,” leaving open the possibility that the regional authority might fund a different shelter option.

However, because the money is supposed to “operationalize” funding in the state capital budget that was explicitly for “tiny homes,” it’s likely that advocates for tiny house villages would object strongly to using the money for some other kind of shelter. Authority CEO Marc Dones has expressed skepticism about tiny houses as a form of temporary shelter, noting that people tend to stay in villages far longer than the city’s own goals for the program.

There’s also funding in the proposal for a new men’s shelter run by Africatown at a former nursing home in the Central District; ongoing support for the Salvation Army’s mass shelter in SoDo; and about $190 million for new housing, paid for through the voter-adopted housing levy, federal dollars, and other funding sources.

Durkan’s proposed budget increases funding for Parks’ encampment work by almost a million dollars, adding 6.5 full-time equivalent employees to respond to “the increased demand on [Seattle Parks and Recreation] to address impacts of unmanaged encampments, such as litter removal, storage of personal belongings, and data collection & reporting in compliance with Multi-Department Rules (MDAR).”

The budget also proposes $6 million for services to help people who receive federal emergency housing vouchers maintain their housing when the vouchers run out. Some of this money, according to the budget summary, could come from rapid rehousing funds. As we’ve reported, the city’s plan to move people quickly from two shelter-based hotels into apartments using rapid rehousing subsidies has failed to place many people in housing, largely because the people moving into the hotels tend to be poor candidates for rapid rehousing programs, which generally require tenants to pay full market rent within a few months to a year.

• Although Durkan’s budget plan relinquishes control of most homelessness work, it still assumes that the city, not the regional authority, will maintain its role removing encampments and, to some extent, doing outreach to unsheltered people, although the form that role will take is unclear. Budget director Ben Noble told PubliCola yesterday that although “the shelter contracts and related pieces are all going to the regional authority… the feeling was that folks who are on the street and not in a sanctioned encampment but living outside are sill the primary responsibility of the city.” Continue reading “Durkan Budget Would Gut JumpStart Spending Plan, Increase Funding for Encampment Response”