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Tuesday, July 19, 2011

Mike McGinn, Fiscal Conservative

Posted by on Tue, Jul 19, 2011 at 3:01 PM

All other bullshit aside, it turns out that Seattle city government is pretty damn well run.

At a special budget meeting of the Seattle City Council yesterday, Mayor Mike McGinn's budget director Beth Goldberg introduced several proposals for replenishing and strengthening the Revenue Stabilization Account, the city's "rainy day" fund, which now stands at $11.2 million, down from a high of $30 million in 2008. The proposals include dedicating 0.5 percent of all general revenue tax receipts to the fund, along with half of all end-of-year fund balances in excess of that forecast. The rainy day fund is capped by law at 5 percent of annual general revenue tax receipts, currently about $37.5 million, and the goal would be to rebuild the reserves toward that maximum amount.

Why set aside millions of dollars a year at a time when the city is already struggling to balance the budget in the face of declining tax revenues? Isn't this a rainy day? Isn't the goal of the rainy day fund to fill budget gaps just like the one we have now?

Well, not exactly. According to both Goldberg and the council's central staff director Ben Noble, the purpose of the reserve fund is to help ease the transition to a lower budget state rather than avoiding the transition entirely... a role the fund has played well over the past few years. Now that this adjustment period is over, it's time to rebuild the reserves, they argue, so that the city is well situated to weather future economic downturns.

Seattle also maintains an additional $44.3 million in its Emergency Reserve Subfund (think earthquake), and it turns out that fiscal prudence like this has served the city well, enabling it to preserve its AAA bond rating throughout the Great Recession, even as some other municipal governments teeter on the brink of insolvency. (For example, Jefferson County, Alabama, is asking creditors to forgive $1.3 billion of its $3.2 billion in sewer debt in an effort to avert what could be the largest US municipal bankruptcy ever.)

Seattle's bond rating doesn't just effect borrowing costs for the city proper, but also for capital intensive agencies like Seattle Public Utilities. While the impact of bond rating changes are hard to calculate, Noble says that the difference between one ratings notch could come to "hundreds of thousands if not millions of dollars" in additional interest payments a year.

So yeah, Mayor McGinn is a tree-hugging/bike-riding/tunnel-hating/closet-San-Franciscan, but when it comes to fiscal matters, it turns out he's rather, well, conservative compared to say, the debt-addled speculators running the foundering Seattle Times. Even McGinn's opposition to the deep bore tunnel—an obsession that some have used to label him a goofy liberal—is largely based on fiscal concerns: That it is too expensive, provides too little benefit for the cost, and poses an unacceptably high risk to tax payers.

I know this portrait of McGinn as a fiscally responsible budgeter runs counter to caricature, but it's hard to argue otherwise.

 

Comments (13) RSS

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1
To be clear, I'm not a McGinn partisan. (I voted for Mayor Nickels in the primary.) I just calls 'em as I sees 'em.
Posted by Goldy on July 19, 2011 at 3:03 PM
Baconcat 2
How dare you say something nice about the mayor, you bootlicking greeno-pinko.
Posted by Baconcat on July 19, 2011 at 3:12 PM
chimsquared 3
He's not perfect. But he's a good mayor. A really good one. And "closet-San-Franciscan" was a little harsh. Especially how he dresses.
Posted by chimsquared on July 19, 2011 at 4:17 PM
4
Goldy - all of these policies were established under the previous budget director - Dwight Dively. They have NOTHING to do with McGinn having an original thought about budgets. You need to give REAL CREDIT where it is due, and expand your rather narrow field of vision.
Posted by getaclue on July 19, 2011 at 4:51 PM
5
@4, So McGinn doesn't deserve any credit for continuing and expanding on these policies?
Posted by Goldy on July 19, 2011 at 5:09 PM
Baconcat 6
@4: So he doesn't do what the guy before him did and you hate him... but when he does what the guy before him did you still hate him.

MAKE UP YOUR FUCKING MINDS.
Posted by Baconcat on July 19, 2011 at 5:13 PM
7
"@4, So McGinn doesn't deserve any credit for continuing and expanding on these policies? "

No. Not fucking up what isn't broken isn't worthy of praise, it's what you ought to be doing.
Posted by Reader1 on July 19, 2011 at 6:03 PM
Will in Seattle 8
Let us be clear.

The pro Deeply Borrowed Tunnel council is in no way, shape, or form, "fiscally responsible".

Unless you're living in a Katamari vision of reality ...
Posted by Will in Seattle http://www.facebook.com/WillSeattle on July 19, 2011 at 6:30 PM
The Wretched Harmony 9
Ideologues from the furthest extremes of the left and the right both wear the same hairshirt.

They share other qualities, like an unwillingness to compromise, or even acknowledge opponents' views. Manicheanism. They agree you have to break a few eggs, and all that. They inspire fear for good reason.
Posted by The Wretched Harmony on July 19, 2011 at 9:20 PM
10
Is it just me or is anyone else pretty much okay with McGinn as mayor? I don't love everything he does but I feel that way about every politician.

Yeah...he's ok.
Posted by slackerina on July 20, 2011 at 10:11 AM
11
@3

I'm pretty sure that the "closet-San-Franciscan" comment was a swipe at one of the Seattle Times nitwits.
Posted by MichaelfromHA on July 20, 2011 at 10:34 PM
12
@9
McGinn was elected to do a job, when the other side wants you to do something other than the job that you were elected to do why should you work with them? It's the other side that's the problem here. That and the uber stupid "Seattle Way." I really hope The Seattle Way gets hit and flattened by a light-rail train.
Posted by MichaelfromHA on July 20, 2011 at 10:37 PM
Cascadian 13
Even for those who are in true love with the tunnel, I don't get why they have a general problem with McGinn. I think people just like to have someone to blame and he's a convenient target.
Posted by Cascadian on July 21, 2011 at 3:25 PM

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