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Monday, August 7, 2006

The Forever Tax

Posted by on August 7 at 18:16 PM

The city council passed an amended version of Mayor Nickels’s transportation tax package today. The package, which would pay for road and bridge maintenance citywide (full report in “In the Hall” this Wednesday) includes a tax on commercial parking (yay!); a $25-per-employee head tax on employers who don’t pay for bus passes (boo!what about people who walk, bike or carpool? And Metro passes are more expensive than the tax); and a measure on the November ballot that would increase property taxes to pay for two-thirds of the proposed improvements.

The property tax has been billed as a $1.6 billion tax over 20 years. The problem is, the tax isn’t limited to 20 years. Under state law, it can last forever. That’s because state law prohibits cities from passing property tax increases that last longer than eight years. The 20-year timeline, in other words, is just a suggestiona fact made abundantly clear by the nonbinding resolution the council passed as part of the tax package stating its “intention” that the city “will not levy any of the additional taxes that were authorized” under the measure. The resolution passed unanimously.


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The real problem with this bond issue -- and we certainly do need to spend money on transportaion -- is that the Mayor and Council can divert it to the Tunnel. There is no effective way to stop them from doing so once it is passed into law and a "decent interval" has passed so that people forget and the Elected can plead the excuse of "changed circumstance." Yes, there even may be a clause which says that they shouldn't use the funds for the Tunnel. But do you really believe that that will stop them?

That's why (with great reluctance) I will most likely vote "Bo."

"Bo"?

"Bo": An intermediate position between "Yea" and "Nay."

I'm with the Bo crowd.


I am leaning to a "NO". Understandably, the city is trying to get in line first and get their cut before the voters are subject to requests for regional transit tax increases.

People are beginning to feel they are getting tapped-out, and this will cause havoc trying to fund additional downstream transportation needs.

David Sucher makes an excellent point about the potential for funds being diverted to a potential Tunnel project or other projects....520, for example. You leave the candy out and sooner or later somebody is tempted to eat it.

Based on this mayor's history of overseeing public capital projects (Sound Transit and the recent Firehouse levy, as examples), I am particularly concerned the money will not fully fund what it is intended to fund. It is unfortunate that Seattle's mayor and city council have not learned they need to start thinking how to do more with less.

---Jensen

I'm all for taxing employers who don't OFFER a bus pass for employees - but an employee needs to be able to turn it down, otherwise it'll just make companies buy passes that go unused. Of course, what I'd like to see are incentive programs to reward employees who don't drive to work - whether they walk, bike, or take public transportation.

Good point about the funds getting diverted to the tunnel.

I think that Nickels was also involved with the original construction of the downtown bus tunnel. You know, the one that's now closed to make way for his Sound Transit light rail project and to pull out the built-in light rail tracks that were a key selling point in getting people to support the tunnel construction, but turned out to be useless because they were the wrong size and without insulated tracks.

Way to lead, Greg!!

Great find -- "20 years" really is "many years more than 20 and we'll tell you how many after the vote." That is the exact same kind of GARBAGE we've seen from other Nickels-backed transit plans, so I'm disappointed but not surprised.

Oh, don't get me started on the bus tunnel. It's been passed now, but for a while it was the biggest boondoggle in the country, and damn near destroyed downtown. And has no function. And has to be rebuilt now.

Jean Godden was on The Conversation last week and said that businesses with very few employees are exempt, as are those that provide bus passes, or with employees who bike or walk to work. It also exempts businesses with something like less than $50,000/year in revenue.

All the same, I'm voting against it. Too much, too vague, too long, too many projects, and frankly, I'm getting a little sick of my property tax going up by so fucking much every year. If I'm gonna vote for another $255/year in property taxes, it damn well better be for schools, social services, mass transit, or vital infrastructure.

Uh...would you believe that I meant to write "Boo?"

Probably not.

Gitai and others - the "head tax" (tax to non-exempt businesses per number of employees) and the parking tax are not part of the ballot measure. The Council voted today to enact them. It is the property tax that voters will be asked to vote upon.

Great post ECB. How has the major media missed this?

I know, calm down Jean, but I got another dose of the news from another blog and then decided to write to the Mayor's Office..... I'm really pissed off at the leadership in this city. The SMP Board, the viaduct plans, 520, all of it is too much. I'm voting yes for the RTID next year because it's the best hope for more mass transit and that is a sad reality. Why couldn't City Hall decide to do more for transit? Fine, put more money up for roads, but pair it with transit. Shit, I sound like a lunatic, but did anyone watch the proceedings on the Seattle Channel? It just boggles my mind. Why can't a great city like Seattle have great leaders to put forth great ideas to solve our great big traffic mess? We need more options.

Frankly, I think the suggestion that the money will somehow be diverted to the tunnel to be paranoid and a bit irresponsible. This is a fairly specific package of improvements. Electeds would be crazy to touch it much with all of the active neighborhoods in the city.

What disturbs me most about this proposal is that is sets up a semi-permanent fund for road maintenence. This is a basic government function we are taxed for. Meanwhile the city budget is chock full of neighborhood programs, etc. All worthy, but hardly basic functions of government. It seems to be a backwards way of budgeting. The tax needs to be shorter in length and the city needs to find a better funding source for the long term.

"I think the suggestion that the money will somehow be diverted to the tunnel to be paranoid and a bit irresponsible."

Neither paranoid nor irresponsible, (and funny that someone behind a handle should mention trust and responsibility.)

As a matter of fact I asked the City itself about the use of the funds.

Satisfy yourself. Go ask the Mayor and the Council and SDOT. See if they will commit in writing and publicly to not spending this money on the Tunnel. Ever.

Go look into the way these bond issues work in practice. They are written quite broadly and give -- by reasonable necessity, in fact -- government decision-makers a great deal of discretion to adjust to "changed circumstances." That means that they can shift the money to the Tunnel if they want to. Even if there is a specific list of projects, if for one reason or another conditions change then the officials have to be able to move the money around within some broad categories.

And to prevent them from doing so means you have to go to Court. Try that 5 years from now when the Tunnel fiasco is caught up in massive cost overruns, downtown torn apart, and the City is desparately seeking money to finish the project. No, that $1.6 billion is a cookie jar.

"I'm voting yes for the RTID next year because it's the best hope for more mass transit and that is a sad reality."

Um, where to start . . ..

OK, you want mass transit? The best hope for that would be for the combined RTID and ST measures to be defeated in 2007. That outcome next year probably would result in 1) better state statutes with more protections for citizens against arrogant local governments, and 2) both a roads package and a transit package that are smaller, more readily financed, and better designed to serve macro societal needs.

"Businesses with very few employees are exempt, as are those that provide bus passes, or with employees who bike or walk to work."

I'm not a libertarian, but isn't this just micromanaging the affairs of other just a bit too much? Employees, plural, so if I have a thousand employees, and two of them walk to work, I'm exempt? And who's going to monitor it? Sure, I'll tell the city I bike to work, but who's checking that that's not a car I'm getting out of every morning? How many people is it going to take to manage this program?

One problem with these special taxes is that they fund stuff that is supposed to be paid out of the budget with regular tax money that everyone pays. Of course, everybody doesn't pay; people who don't own property get a free ride. That's dumb, but this doesn't fix it.

I do support certain kinds of user FEES to collect $ and to discourage/encourage certain types of behavior. Tax parking up the wazoo, that's fine. But this package sounds like a joke.

First of all, I'm one that wants to see the tunnel happen. I think its really short sighted to tear down the viaduct to throw cars back on streets, and equally short sighted to replace an eyesore with another eyesore. I'm also tired of bus, bus, bus. Either we develop proper rapid transit (ie things like the monorail) or we remain mired in the same traffic as cars. We need to start working on efficient transit in the city core, and as I've said in prior posts building light rail so 5 Microsofties an hour can get to their cubicle in Redmond serves less of a purpose than serving West Seattle, Ballard or many other neighborhoods in the city. Buses should be in the mix, but to use them as the primary mode of transit into areas of high density will further clog roads.

VACATION SOON Wrote:
"Frankly, I think the suggestion that the money will somehow be diverted to the tunnel to be paranoid and a bit irresponsible."

Actually Vacation, not being watchfull and not having methods in place to ensure the monies are used as promised would be perticularly irresponsible.

As FNRAF and I pointed out, a number of capital projects under the direction of local politicians have been exceptionally costly; not been completed in a timely manner and delivered much less than promised.

Sound Transit Phase 1 has a cost overrun of over $2 Billion dollars; is years behind and was shortened. Please do correct me if I am wrong here, but I do believe this all occured during Nickels' watch on the Sound Transit board.

Experience would suggest it is in our best interest to be prudent, and that is far from your claim that we are being paranoid.

I think that we have all learned that being good politicians doesn't necessarily equate to having the skills of being good managers. Certainly this is something we should all consider the next time we step into a voting booth.

---Jensen

Fnarf, if you had a thousand employees, you'd have to have like 998 of them biking or walking to work to get exempted. And there should be financial incentives and disincentives to encourage things like biking or walking to work. The last thing we want is to have as many fatasses here as they do in Houston.

Jensen:

ST will be forcing this community to pay 600% of the taxes it told the voters it would need to construct Phase 1. That figure is based on the committment the ST board made to the bondholders in Jan. '05 to collect 25 more years of the ST sales tax at the .4% rate.

Thank goodness our Mayor and Council are finally getting around to dealing with the important issue of making it easier to get around our city in a car. We've already spent way too much of our time and money on those secondary issues like schools, parks, public safety, homelessness, mass transit, etc. When are people going to understand that there is no single issue more critical to the future of this city than pothole-free roads!

re: bus passes being more expensive than the head tax... you pass the tax because a company in the status quo can just not buy bus passes for its employees and bear no responsibility for transport infrastructure. But if you put a head tax down, they still have to pay something for transport infrastructure, since their workers all have to commute on the same roads, whether by car, truck, bus or bike or on foot.

Gitai, our culture is nowhere close to the one that produces "fatasses like they have in Houston." And we need more than simple financial incentives and disincentives... you need to promote the things you want people to do. Most of them don't have a clue otherwise.

Re: whether the tax could be diverted to the viaduct: I don't know if it's "paranoid" or not to think this could happen (the first year is definitely a specific package of expenditures, but the next 19-plus years aren't charted out so specifically) but it definitely could. The council passed amendments saying that neither the parking tax nor the employee head tax could be spent on the viaduct replacement, but they passed no similar amendment regarding the property tax levy... So anything's possible.

ECB that is excellent reporting. The dailies do not do what you did - dig beneath what the press releases say on this kind of subject.

ECB and others - Councilmember Licata offered this amendment:

"No Levy Proceeds shall be used to fund the major repair or replacement, including but not limited to replacement with a waterfront tunnel, of the Alaskan Way Viaduct or the seawall located to the west of Alaskan Way."

It passed...

Thanks for the update, LH. Is there anything in the resolution that would prevent any of the Levy Proceeds from being collected after twenty years passes?

Look, I'm a transit supporter. I voted for monorail, light rail, and I campaigned for both.

I just can't bring myself to vote for this. Something smells.

I will vote for the county "more bus service" issue. That one rocks! Even if it doesn't give us the 40 percent we in Seattle should get, since we have profitable bus lines and pay 40 percent of taxes. But that's cool, even so.

Sorry, color me uninspired by Greg's boondoggles.

oh, and I'm in favor of the parking tax and the non-transit employee tax to pay for transit.

it's just this package and my lack of trust they won't divert it for the underwater tunnel we can't afford.

ECB, LH.

I think Licata's amendments are great.

But from my understanding they are not binding forever. The law recognizes that legislative bodies have to adjust to "changed circumstances" and that some significant flexibilty with bond issues are permissible. (And I would agree in theory thatthat is a good idea.)

From my experience observing government I believe that a Mayor and Council 3-4 or 10 years from now could divert those funds directly or use them in some fashion (such as by using them to free up other funds) so that in the final analyisis they would have more money to spend on the Tunnel.

Considering their infatuation with the Tunnel, why would anyone expect anything different? So far they appear to be true believers who will stop at nothing to get their Tunnel.

good points.

oh, and I'm not that thrilled with the RTID - ST is ok, but to heck with letting more road-huggers suck money out of Seattle for their empty ST projects.

I'm not going to be happy unless "Bo" is an option on my ballot from now on.

...people who don't own property get a free ride...

Hardly, landlords pass on their property tax costs onto tenants.

dunno if those asking are still checking this thread...

1) The resolution isn't binding...which is precisely why ECB is referring to the levy as the "forever tax"

2) the amendment to the levy bill re: viaduct is binding - as I understand it until the law is changed. For levies there are fairly significant hurdles to do that. I haven't checked the ordinance for this language, but usually the ordinance contains language concerning these hurdles (I remember the Pro-Parks Levy had language that did something like required concurrence from a citizens group, parks board, and City Council)

Seattleites, you deserve everything coming to you in the form of tax increases. You continue to elect numbskulls and fools to public office. I saw this coming and moved to the Eastside 10 years ago. Unfortunately, my escape is not complete because the impacts from their mis-management and incompetence cannot be contained within the City limits. It is past time for you to wise-up and replace your City and County government with persons that are qualified to govern. In the interim vote every tax increase proposal down. Taxpayers revolt!

What the heck are they doing with the taxes they've ALREADY collected?

Government's primary responsibilities are Safety (Police, Fire, etc) and Infrastructure (roads, Rails, etc.) These primary duties should be funded FIRST and all the other pet projects out of what's "left".

Why the heck are those pinhead "Representatives" blackmailing us for more taxes?

Why do you Seattle-ites not vote those thieves out of office? Do you LIKE being victims? Or perhaps its the "tax the other guy, but you better not tax me!" mentality that facilites despotic regimes (such as the Seattle City Council)?

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