Tag: taxes

Democratic Party, Elections, homelessness, housing, King County, Morning Crank, Poverty, Taxes

Afternoon Crank: Competing for a Limited Number of Units

1. While the city of Seattle was debating over the merits of the head tax last week, the King County Auditor’s Office quietly released a report on the region’s response to homelessness that concluded, among other things, that “rapid rehousing”—which provides short-term rent vouchers to low-income households to find housing in the private market—isn’t working in King County. The city of Seattle’s adopted Pathways Home approach to homelessness suggests investing heavily in rapid rehousing, which assumes that formerly homeless people will be able to pay full market rent on a private apartment within just a few months of receiving their vouchers.

For this system to work, either: a) formerly homeless people must get jobs that pay enough to afford full market rent in Seattle, currently over* $1,600 for a one-bedroom apartment, before their three-to-12-month vouchers run out, or b) formerly homeless people must find housing that will still be affordable after they no longer have the subsidy. The problem, the King County report found, is that there are only about 470 private units available throughout the entire county, on average, that are affordable to people making just 30 percent of the area median income—and the competition for those units includes not just the hundreds of rapid rehousing clients who are currently looking for housing at any given time, but all the other low-income people seeking affordable housing in King County. Seattle’s Pathways Home plan would dramatically increase the number of rapid rehousing clients competing for those same several hundred units.

“Given market constraints, difficulties facilitating housing move-ins could limit rapid rehousing success,” the auditor’s report says. “As local funders increase their funding for RRH, it is possible that move-in rates will go down as more households compete for a limited number of units. Given the importance of client move-ins to later success, if this occurs additional funding spent on RRH may have diminishing benefits relative to its costs.” Additionally, the report notes that a proposed “housing resource center” to link landlords and low-income clients seeking housing with vouchers has not materialized since a consultant to the city of Seattle, Focus Strategies, recommended establishing such a center in 2016. In a tight housing market, with rents perpetually on the increase, landlords have little incentive to go out of their way to seek out low-income voucher recipients as potential renters.

2. Learn to trust the Crank: As I predicted when he initially announced his candidacy at the end of April, former King County Democrats chair Bailey Stober, who was ousted as both chair of the King County Democrats and spokesman for King County Assessor John Wilson after separate investigations concluded that he had engaged in unprofessional conduct as head of the Democrats by, among other things, bullying an employee, pressuring her to drink excessively, and calling her demeaning and sexist names, will not run for state legislature in the 47th District.

Fresh off his ouster from his $98,000-a-year job at King County, and with a $37,700 county payoff in hand, Stober told the Seattle Times‘ Jim Brunner that he planned to run for the state house seat currently held by Republican Mark Hargrove. Stober’s splashy “surprise” announcement (his word) came just days before a candidate with broad Democratic support, Debra Entenman, was planning to announce, a fact that was widely known in local Democratic Party circles. In a self-congratulatory Facebook announcement/press release, Stober said that he decided not to run after “conversations with friends, family, and supporters,” as well as “informal internal polling.” Stober went on to say that his “many supporters” had “weathered nasty phone calls and texts; awful online comments; and rude emails from those who opposed my candidacy. We chose not to respond in kind. They went low and my supporters went high.” In addition to routinely calling his employee a “bitch” “both verbally and in writing,” the official King County report found that Stober “made inappropriate and offensive statements about women,” “did state that Republicans could ‘suck his cock,'” and “more likely than not” referred to state Democratic Party chair Tina Podlodowski as “bitch, cunt, and ‘Waddles.'”

3. On Monday morning, Gov. Jay Inslee and Secretary of State Kim Wyman announced $1.2 million in funding for prepaid-postage ballots for the 2018 election. The only county that won’t receive state funding? King County, which funded postage-paid ballots for the 2018 elections, at a cost of $600,000, over Wyman’s objections last week. 

County council chairman Joe McDermott, a Democrat (the council is officially nonpartisan but includes de facto Democratic and Republican caucuses), says he was “really disappointed” that Inslee and Wyman decided to keep King County on the hook for paying for its own prepaid ballots, particularly given Wyman’s objection that the decision should be left up to the state legislature.

“She was against it before she was for it,” McDermott told me yesterday. Wyman’s office, McDermott says, “wasn’t working on the issue last year in the legislature, and yet all of a sudden she can find emergency money and appeal to the governor when King County takes the lead.”

In their announcement yesterday, Wyman and Inslee said they will “ask” the legislature to reimburse King County for the $600,000 it will spend on postage-paid ballots this year, but that funding is far from guaranteed. Still, McDermott says their decision to backfill funding for postage-paid ballots for Washington’s remaining 38 counties could set a precedent that will create pressure on legislators to take action next year. If the state believes it’s important to make it easier for people to vote in 2018, he says, “why would they argue that they’re not going to do it in the future? If it’s valuable this year, it should be valuable going forward.”

4. Dozens of waterfront condo owners spoke this afternoon against a proposed Local Improvement District, which has been in the works since the Greg Nickels administration, which many called an illegal tax on homeowners for the benefit of corporate landowners on the downtown waterfront. The one-time assessment, which homeowners could choose to pay over 20 years, is based on the increase in waterfront property values that the city anticipates will result from park and street improvements that the LID will pay for. Several homeowners who spoke this afternoon said they rarely or never visit the downtown waterfront despite living inside the LID assessment district, either because they live too far away (one condo owner said he lived on Fifth Avenue, and considered the hill leading down to the waterfront “too steep” to traverse) or because the waterfront is always clogged with tourists. Another, homeowner Jonathan Mark, said the city was failing to account for the decrease in property values that could result from “turning Alaskan Way into a freight highway.”

The median assessment on residential property owners, who own about 13 percent of the property that would be subject to the assessment, would be $2,379, according to the city’s Office of the Waterfront.

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.

Addiction, Affordability, City Council, City Hall, homelessness, housing, human services, King County, legislature, Mayor Durkan, Poverty, Taxes

Controversial Head Tax Passes After Weeks of Bruising Debate

After a weekend of negotiations between city council members and Mayor Jenny Durkan (and, according to council president Bruce Harrell, “conversations with Amazon, big business, small business, [and] homeless advocates”) the city council unanimously approved a new version of the controversial employee hours tax today, imposing a $275-per-employee tax on about 585 businesses with gross receipts of more than $20 million a year.  The $275 figure was a  “compromise” between the $500 tax passed out of committee last week by a slim majority of council members and the $250 tax proposed by Harrell and Durkan, which emphasized short-term shelter and garbage cleanup over permanent housing, and would have built just 250 new units of housing over five years. Durkan had threatened to veto the larger tax proposal, and as several council members noted on the dais this afternoon, the council majority was unable to convince one of their colleagues (such as council member Rob Johnson) to switch sides and give them a veto-proof majority. The $500 head tax proposal was the result of months of work by the city’s progressive revenue task force, which was appointed after a last year’s budget process and charged with coming up with a proposal to tax businesses to pay for homeless services and affordable housing. (Johnson, who was seen as a potential swing vote, cited the need for a process like the one the task force went through in voting against an early head tax proposal last year.) The task force issued their report in March.

The tax, which sunsets after five years (and which will no longer be replaced, as in previous versions of the legislation, with a business payroll tax), would raise about $47 million a year for new housing, rental subsidies, and supportive services. According to the spending plan the council also adopted this afternoon, that would be enough to build about 591 units of housing—288 for low-income people making between 30 and 60 percent of Seattle’s area median income and 303 permanent supportive housing units for formerly homeless people making between 0 and 30 percent of median. (The full spending plan is available here.) The plan also includes rental subsidies to get homeless people into “immediate housing,” funding for a total of about 250 new shelter beds and authorized encampments, more parking lots for people living in their cars, and sanitation facilities. The adopted spending plan, which allocates about two-thirds of the head tax revenues to housing, reverses the priorities in the spending plan proposed last week by Mayor Jenny Durkan and council president Bruce Harrell, which would have spent 70 percent of the revenues from the head tax in years 1 and 2 (and 60 percent in years 3 through 5) on short-term emergency shelter, garbage cleanup, and a new Navigation Team to coordinate the removal of unauthorized encampments and the people in them.

Prior to their vote for the tax, several council members expressed regret that they failed to come up with a compromise that could convince at least one of their colleagues to join them in a veto-proof majority in favor of a larger tax, such as the $350 compromise council member Lisa Herbold floated Friday. Council member Lorena Gonzalez, who was one of the co-chairs, along with Herbold, on the progressive revenue task force, said, “While I’m excited that we will be taking this vote… to reestablish a head tax… it’s regrettable that we were unable to find a path amongst our colleagues and with the mayor that they would be willing to support a higher taxation rate than $275.” Council member Mike O’Brien, who recently weathered hours of verbal abuse at an out-of-control forum on the head tax in Ballard, sounded grim as he conceded, “I’m settling for this level of service.”

Business leaders continued to grumble about the tax. The Downtown Seattle Association issued a statement decrying the tax as “bad economic policy [that] will negatively impact Seattle’s economy and city tax revenues,” and Amazon said in a statement that the “tax on jobs” makes the company “very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

The next battle for homeless advocates at city hall will be over the spending plan for the tax—a component of the plan that is in many ways more critical than the amount of money the tax produces. Durkan’s proposed spending plan, with its emphasis on emergency shelter, encampment removals, and tiny houses, would have largely backfilled spending on programs for which funding is about to run out (the plan contained a $15 million-$16 million annual line item to “continu[e] programs which had one-time funding in the 2018 budget, or insufficient funding, plus unspecified “new emergency, temporary, and enhanced shelters, navigation centers… and/or service and safe parking for vehicular living”), reducing the impact of the new revenues to whatever is left over once all the programs that are running out of money are funded. Although the council adopted the spending plan, that vote was narrow (5-4, along the same lines as Friday’s vote) and the actual implementation plan will have to be proposed by Durkan and adopted by the council as part of this year’s budget process.

Before the vote, council member Teresa Mosqueda said the new revenues from the head tax “are supposed to be in addition to” existing spending, not a replacement for it. Asked specifically about this concern at a press conference after the vote, Durkan pivoted to talking about the need to examine the council’s proposed spending plan itself, which she said would fund “a number of programs, such as shelter and supportive housing,” for which long-term funding is not secure. She did not answer the question about whether she would push for a spending plan that used new dollars to pay for existing funding commitments.

The insistence on funding existing shelter beds, from some of the four-member council minority as well as Mayor Durkan, is somewhat ironic. After all, it was the city council itself (with then-mayor Tim Burgess’ support) who adopted a spending plan for homeless service providers last year that eliminated funding for many basic shelters, on the grounds that they failed to demonstrate that they could move their clients into permanent housing quickly. The new standards for shelter providers, for example, withhold funding if those shelters fail to move 40 percent of their clients into housing within three months, a standard that few emergency shelters can meet, particularly those serving the clients who are hardest to house.

The emphasis in the Durkan/Harrell plan on funding shelters rather than housing also flies in the face of what virtually every expert, from the city’s homelessness consultant Barb Poppe to the city’s Human Services Department to a Seattle Metropolitan Chamber of Commerce-commissioned report to former All Home King County director Mark Putnam, which is that a solution to homelessness requires getting people into housing, not tents and “tiny houses” (which Putnam recently referred to as “glorified garden sheds.”) Asked why she supported a split that favored spending on shelters over housing, Durkan responded, “because I think the people of Seattle think that we’ve got to make a difference in homelessness tomorrow. We need to get  people off the streets and get them a safe place to live. None of this housing will come online for years.”

Mosqueda told me before the vote that she was “not interested” in a spending plan that funds temporary shelter “that evicts people in five years and fails to build the housing we need.” The problem in Seattle, Mosqueda argued, is not so much lack of mats on the floor as a lack of affordable housing, and providing more temporary shelter beds is only a “Band-Aid” that fails to address the larger affordability problem at the root of Seattle’s inability to move people from shelter to housing. In a memo released earlier today, Mosqueda staffer Michael Maddux wrote that in the Durkan/Harrell plan, “There does not seem to be increased capacity in funding to support short-term enhanced shelter, and with the draconian cuts to the housing component, no plan appears in place to provide permanent housing for people moved into the few new beds created (about 1,000) by the Mayor’s plan.”

One thing everyone on both sides agreed on is that homelessness is a regional, not a Seattle-only, problem. “Seattle can’t go it alone,” Durkan said during her press conference. “This is a regional crisis that demands a regional response.” That quote might have been lifted verbatim from any other number of press conferences by any number of Seattle officials, past or present. Seattle officials routinely implore “the region,” usually meaning King County, to step up and pay their fair share to address every challenging problem, whether it’s inadequate transit or inadequate funds for housing.  Whether that additional funding will materialize is uncertain. Durkan announced this morning that the state has come up with an additional $40 million for behavioral health services in 2018, and $18 million to $20 million a year after that, and that King County has said it will provide the city with $5.7 million to expand shelter and “safe alternatives for people living outdoors” in 2018. Little is currently known about what strings are attached to this funding or how it can be spent.

Beyond the $5.7 million announced this morning, the county has been parsimonious with its funding to address the crisis. (It did adopt a resolution today declaring May 14-20 “Affordable Housing Week” in King County,  “all county residents” are encouraged “to embrace affordable housing opportunities in their communities.”) Last week, King County Executive Dow Constantine suggested last week that the city needs to slow down and work on a regional approach through the massive “One Table” task force, which began meeting back in January. One Table was supposed to have finished up its meetings and announced its recommendations for a regional approach to addressing homelessness by now; instead, they have canceled their past two meetings and have been very quiet since April. One Table may ultimately come back with a recommendation for a countywide levy, or a sales tax to pay for housing and services (two of the only options available to local governments in Washington State), or it may not. Either way, Seattle is moving forward with what is at least an attempt to address the crisis of homelessness within its borders. Whether the scaled-back proposal adopted today makes a perceptible, measurable dent in homelessness, or whether it merely provides more fodder for anti-tax activists who insist that the city is wasting its money because the problem isn’t getting any better, will be clear soon enough.

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.