After Defeat of Head Tax, Council Scrambles for Plan B

City council budget committee chair Lisa Herbold made a risky gamble this week, and she lost. As a result, the council will pass a budget this coming Monday whose details were thrown together largely at the last minute, after a budget proposal that hinged on the passage of the controversial employee hours tax failed to secure a majority.

The gamble Herbold took was fairly straightforward, First, she proposed a version of the budget that incorporated revenues from the head tax—a $125-per-employee tax on businesses with more than $10 million in gross receipts, known as the HOMES tax. Second, she made sure that city council members’ top-priority projects would be on the chopping block without the tax, so that any council member who voted against the tax would risk losing funding for her favorite projects. Third, instead of coming up with a backup plan in collaboration with head tax opponents, she crafted a “Plan B” that included draconian cuts to council members’ priorities (including the criminal justice diversion program LEAD, housing for homeless Native Americans, and trash removal at homeless encampments), giving them an additional incentive to vote “yes” on the tax.

The problem was with step 4—the one where a majority of council members were supposed to fall in line and support the tax. That didn’t happen, for a number of reasons. First, some council members were simply dead set against passing the tax, or—to hear council members like Lorena Gonzalez tell it—opposed to passing it on a rushed timeline without an opportunity to do deeper analysis and look at other alternative revenue sources. (Council members have had less than three weeks to consider the proposal.) Second, several council members bristled at the way Herbold’s initial balancing package, in council member Debora Juarez’s words, “held hostage” so many important projects by putting them “in the head tax parking lot.” Juarez, in particular, was indignant about this forced tradeoff. And third, potentially persuadable council members may have been put off by the behavior of the head-tax supporters who showed up, many at Sawant’s behest, day after day, screaming invectives (“Shame!” “Their deaths are on your hands!” “Republican!”) at council members who didn’t fall in lockstep behind the proposal.

After the tax failed, it became clear that Herbold didn’t have a backup, and the council ended up canceling a scheduled budget meeting to hammer one out. The result was that the process that led to a final budget package was disorganized and chaotic, with some council members reportedly in the dark about budget amendments until less than an hour before they had to vote them up or down. (Many amendments weren’t available in hard-copy form until minutes before they were voted on.)

A few things stand out about the substance of the budget package that will go before the council on Monday. First, it includes aggressive cuts to incoming mayor Jenny Durkan’s budget. If the budget passes unchanged on Monday, the city’s first female mayor in nearly a century will have to reduce her budget 17 percent, the equivalent of five mayoral staffers. (This was one of the budget amendments that reportedly came through at the last minute). Much of the money that would have gone to the mayor’s office will now fund new contract management positions in the Human Services Department.

Council members who supported cutting the mayor’s budget, including Mike O’Brien, said they were merely bringing it down to the “baseline” level established under former mayor Mike McGinn. However, that characterization is misleading: McGinn had a skeleton staff because he became mayor during the worst economic recession in recent memory, and made the cut at a time when the city faced ongoing annual revenue shortfalls in the tens of millions. As the economy recovered and all city departments expanded back to pre-recession levels, McGinn’s successor, Ed Murray, staffed up too. While budget cuts during recessions are standard, I can recall no recent precedent for slashing the mayor’s budget so dramatically in the middle of an economic boom. Notably, the council did not propose any cuts to its own staff budget, which council members increased by 33 percent just last year.

Outgoing mayor Tim Burgess fired off a sassy response to the council’s cuts, saying that if the council, “in their wisdom[,] believes these funds are needed for other purposes, and remembering that the Legislative Department’s budget is twice the size of the Mayor’s budget, then the funds should come proportionately from the Mayor’s Office and the Legislative Department.” Should Durkan want to respond to the cuts more directly than Burgess did, she could take a hard look at the dozens of statements of legislative intent the council also adopted today, each of which constitutes a request for the mayor’s office to craft legislation or produce reports and analysis. Or the council could decide to dial back the cuts on its own; they still have until Monday to find cuts elsewhere if they don’t want to pick this fight with the new administration. Durkan, it’s worth noting, did quite well in several council members’ districts, including O’Brien’s (Northwest Seattle) and Herbold’s (West Seattle). Both council members are up for reelection in two years.

The cuts to Durkan’s office highlight another unusual aspect of today’s budget proposal: It shifts a significant amount of money into the city’s Human Services Department from other departments, primarily the Department of Finance and Administrative Services. Although intuitively, it makes sense to move funding for things like homeless encampment removals to the department that hands out contracts for homeless services, HSD was not necessarily clamoring for the change, and will need time to hire seven new employees and train them to do the work FAS has been doing. Durkan, meanwhile, presumably has her own ideas about how the department should be run, and who should run it (the current director is Catherine Lester).

Today’s budget debate also solidified the ideological fault lines on the council—and highlighted the need for someone to serve as de facto council leader. As budget chair and a council veteran (before her election in 2015, Herbold was a staffer for former council member Nick Licata for 17 years), Herbold had a chance to be that leader, by counting votes and dealing with both sides to come up with a best-case scenario for the council’s left wing as well as a viable Plan B that could win the support of a council majority. Instead, Herbold went for broke—proposing a budget that was, in essence, an ultimatum, and declining to work with council moderates like Rob Johnson on a backup plan. That gamble didn’t pay off, even with a reliable ally like Kirsten Harris-Talley temporarily on the council. Once the council equation shifts in November (when Teresa Mosqueda, who handily defeated Herbold-endorsed socialist Jon Grant, replaces Harris-Talley), she could find herself increasingly isolated—insufficiently socialist for Sawant (whose supporters yelled “Shame!” and “Republican!” as fervently at Herbold as they did at Johnson), insufficiently “moderate,” (which is to say, conventionally liberal) for the council’s new majority.

I’ll have more to say about the final budget package on Monday.

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5 thoughts on “After Defeat of Head Tax, Council Scrambles for Plan B

  1. Pingback: 2018 City Budget Passes Without Head Tax. Now What? | The C Is for crank

  2. Pingback: After council punt on employee hours tax, what’s in the plan for Seattle’s 2018 budget — and what isn’t | CHS Capitol Hill Seattle

  3. Pingback: Thursday news roundup: the budget, the DOJ, and parking

  4. Glad to see that demonizing your moderate political opponents (“Shame!” “Republican!” “NIMBY!”) is, perhaps, starting to become a failing strategy.

    Like

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