A coalition led by the Greater Seattle Chamber of Commerce will rally at a press conference to oppose increasing city taxes for businesses later this morning, timed a few hours before the city hold holds hearings on balancing the mid-year budget. The chamber says the city should "cut costs and reduce expenses—as private employers would do—before pursuing new taxes to close the city’s 2010 and 2011 budget deficits." Meanwhile, the city estimates a mid-year budget shortfall of about $12 million, largely due to less tax revenue coming in than it estimated last year, and a gap of next year of $58 million.
Christina Donegan, chamber spokeswoman, says, "Let's consider some other options. Are there ways to reduce costs and create efficiencies internally? This is what private-sector employers have done."
But there's one problem: The coalition isn't making any proposals yet for how the city can "reduce costs and create efficiencies," AKA, cutting the fat from government.
Realistically, there isn't much fat to cut. The city has made severe cuts in the past couple budgets. Last year alone, the city council reduced the parks department budget by $300,000; put 4,282 city employees on furlough to save $6.5 million; eliminated 143 vehicles in the city fleet; cut discretionary spending for travel and training by $2.6 million; eliminated the Office of Policy and Management and cut staffing positions it supported to save $880,000; nixed scores of vacant positions in various other city departments; froze salaries of 100 senior executives, and much more. Even then, the council dipped into the $25 million rainy-day fund, leaving only about $10 million. And while it did float a few programs (like $860,000 to boost library hours) it's clear there aren't many more "efficiencies" to create—unless closing libraries is an "efficiency." Moreover, cities aren't businesses. Cities have certain consumer demands, if you will, that don't change and can't be put off like a business, and when the economy gets bad, some city costs can increase (like public safety and vital human services that save money in the long run).
Donegan acknowledges that businesses and cities don't make an apples-to-apples comparison. Asked twice what, exactly, the city should cut, she says, "I don't have the answer, but you are really seeing businesses engage." (But it's worth noting that the business groups, including the Downtown Seattle Association and Master Builders Association of King & Snohomish Counties, are already thoroughly engaged with the city.)
George Allen, vice president of government relations for the Greater Seattle Chamber of Commerce, says this unprecedented coalition of business groups can teach the city from their own experience. "Businesses have had to do a lot of cutting and a lot of belt tightening to survive through the recession," he says. Those businesses looked inward for advice from their own employees, he adds, and the city should do the same. But asked again for specifics, Allen says, "We prefer at this point to work in partnership with city to find best practices and increasing efficiencies." However, that's slightly at odds with a statement Allen released after Mayor McGinn vetoed an aggressive solicitation bill; Allen said that the veto and "opposition to adding more police officers, raises serious concerns about public safety" even though McGinn actually said that he needed to examine the full budget picture before announcing cuts or committing to hiring 20 new police officers—the sort of frugality Allen is now calling for.
Stacks more efficiencies after the jump.
Allen says he won't address which taxes he wants to avoid, but realistically, these groups have already been clear. They oppose the "head tax," which taxed business $25 for each employee who drives a vehicle to work alone most days. That tax was repealed last year, and is unlikely to come back soon—certainly not in the mid-year budget, which is done by the mayor. Moreover, other taxes, like those imposed on private parking lots, look unlikely as the council and mayor have indicated those wells are better tapped for paying for waterfront reconstruction or funding bike and pedestrian improvements.
In the end, if these groups want more than just a political show, they will need to help answer the question: "What do we cut?"
I asked if Donegan and Allen if they—or any one in their private sector groups who are experts in efficiencies—could get back to me with a proposal. Do they want to cut more parks funding, close human-service centers, set longer furloughs? Allen says it's too soon to know, but that the city has to listen to "people who live throughout Seattle" to, again, make "efficiencies."
But it seems highly improbable that the city can save $58 million in one year—identified by November—by cutting corners on things like saving gas money, printer paper, phones, etc. Huge line items will also need to be cut from the budget. And how many line items can we slash before Seattle becomes less hospitable to business, even if taxes are low? I hope the Chamber of Commerce, realtors, and business federations have some ideas or, at least, compromises—not just calls for more cops and no new taxes. Otherwise they'll come off as a bunch of anti-tax teabaggers.
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