City Budget Roundup, Part 1: Soda, Short-Term Rentals, and Legacy Businesses

I’m leaving town just in time for election day this year (one more year, and it’ll be a trend), but before I do, I wanted to give a quick rundown of what’s happening with the city budget—specifically, what changes council members have proposed to Mayor Jenny Durkan’s budget plan, which holds the line on homelessness spending and includes a couple of controversial funding swaps that reduce potential funding for programs targeting low-income communities. None of these proposals have been passed yet, and the council has not started publicly discussing the cuts it would make to the mayor’s budget to fund any of their proposed new spends; this is just a guide to what council members are thinking about as they move through the budget process.,

This list is by no means comprehensive—the list of the council’s proposed budget changes runs to dozens of pages. It’s just a list of items that caught my eye, and which could cue up budget changes or future legislation in the weeks and months ahead. The budget process wraps up right before Thanksgiving, but the discussions council members are having now could lead to additional new laws—or constrain the mayor’s ability to spend money the council allocates, via provisos that place conditions on that spending—well into the coming year.

Sweetened Beverage Tax 

As I reported on Twitter (and Daniel Beekman reported in the Times), council member Mike O’Brien has expressed frustration at Mayor Jenny Durkan for using higher-than-expected revenues from the sugar-sweetened beverage tax, which is supposed to pay for healthy food initiatives in neighborhoods that are most impacted by both the tax and health problems such as diabetes and obesity, to balance out the budget as a whole. In a bit of budgetary sleight-of-hand, Durkan’s plan takes away general-fund revenues that were paying for those programs and replaces them with the “extra” soda tax revenues, which flatlines spending on healthy-food initiatives (like food banks, Fresh Bucks, and school-lunch-related programs) aimed at reducing consumption of unhealthy food… like soda.

“The intent was pretty clear when we passed the legislation last year about how the funding would be spent,” O’Brien said last week. “What we saw in this year’s budget was [a proposal] that may have technically met the letter of it, but certainly not the spirit.”

O’Brien’s proposal would create a separate fund for soda-tax proceeds and stipulate that the city should use the money from the tax in accordance with the recommendations of the advisory board that was appointed for that purpose, rather than reallocating them among the programs the tax is supposed to fund, as Durkan’s budget also does. (See chart above). The idea is to protect the soda tax from being used to help pay for general budget needs in future years, and to ensure that the city follows the recommendations of its own soda tax advisory group.

Airbnb Tax

When the city passed a local tax on short-term rentals like Airbnbs, the legislation explicitly said that $5 million of the proceeds were to be spent on community-led equitable development projects through the city’s Equitable Development Initiative. This year, state legislators passed a statewide tax that replaced Seattle’s local legislation, but council members say the requirement didn’t go away. Nonetheless, Durkan’s budget proposal stripped the EDI of more than $1 million a year, redirecting those funds to pay for city staff and consultants, prompting council members including O’Brien, Lisa Herbold, and council president Bruce Harrell to propose two measures restoring the funding back to the promised $5 million level and creating a separate equitable development fund that would include “explicit restrictions” requiring that the first $5 million generated by the tax go toward EDI projects, not consultants or overhead.

“I think the mayor did this intentionally,” O’Brien said last week. “I don’t think she doesn’t like the equitable development initiative—I think she’s just struggling to make the budget balance—but this is a priority. We’ve seen with the sweetened beverage and the short-term rental tax that …  when we say we are going to impose a new revenue stream and here’s how we’re going to dedicate it, and then less than a year later someone says we’re going to dedicate it a different way, I think that is highly problematic on a much larger scale than just these programs.”

The council appeared likely to reject a separate, tangentially related proposal by council member Rob Johnson to exempt all short-term rental units that existed prior to September 2017, when the council first adopted rules regulating short-term rentals, from the new rule restricting the number of units any property owner could operate to a maximum of two. Currently, this exemption only applies to short-term rental units downtown and some units in Capitol Hill and First Hill; by providing the same exemption to short-term rentals across the city, Johnson said, the council could provide some certainty that the city would actually bring in $10.5 million in annual revenues, which is what the state projected and what Durkan assumed in her 2019 budget.

O’Brien, who drafted the original short-term rental regulations, suggested Durkan had jumped the gun by assuming the state’s projections were right before the legislation had even taken effect. “Typically, we try to be conservative when we have new revenue sources,” he said. Sally Bagshaw, who represents downtown and Belltown, said she had heard from constituents who bought downtown condos as retirement homes who told her their buildings have turned into 24/7 party hotels with few permanent residents. “The idea of opening this up just for budget reasons is disturbing,” Bagshaw said.”

Totem poles

Photograph by Rick Shu via Wikimedia Commons

As Crosscut has reported, local Native American leaders want the city to remove the totem poles erected in Victor Steinbrueck Park, because they have nothing to do with the Coast Salish people who have long populated the area in and around what is now Seattle. Other totem poles in Seattle, including the Tlinget pole in Pioneer Square, are similarly controversial. Council member Debora Juarez, a member of the Blackfeet Nation, is sponsoring an item that would direct the city’s Office of Arts and Culture to address the issue—not by simply removing the offending poles (which is controversial among some historic preservationists and Pike Place Market advocates) but by reviewing and making recommendations about all the Native American art on all city-owned land in Seattle. In response to Juarez’s proposal, budget chair Sally Bagshaw cautioned that she didn’t “want to get bogged down” in a massive study if the problem of offensive or inappropriate art could be addressed on a case by case basis “when they come to our attention. Otherwise,” Bagshaw continued, “I can imagine someone [stalling the process by] saying, ‘Well, we haven’t looked at our 6,000 acres of parks.'”

Legacy Businesses 

In announcing a proposed $170,000 add for the legacy business program—a plan to protect longstanding neighborhood businesses by providing cash assistance and incentives for landlords to keep renting to them—council member Lisa Herbold called it the policy for which she is willing to “fall on [her] sword” this year. Previous budgets have provided funding to study such a program, but Herbold’s proposal this year would actually get it off the ground, by providing startup and marketing costs for the program. “Much like landmarks are a bridge to our city’s culture and history because of their physical form, sometimes businesses as gathering places are also a bridge to our city’s history and culture,” Herbold said.

Support

Critics have said Herbold’s proposal, like similar programs in other cities, could prevent the development of badly needed housing by saving struggling businesses out of a misguided sense of nostalgia.

In response to a question from council member Teresa Mosqueda about whether the program might allow businesses to relocate or reopen in new developments, Herbold said yes, citing the Capitol Hill writers’ center Hugo House as an example. However, it’s worth noting that the Hugo House is a nonprofit, not a for-profit business, and it was “saved” not by government intervention but by the  private owners of the old house in which Hugo House was originally located, who promised to provide the organization with a new space when they redeveloped their property.

 

Morning Crank: Keep Seattle What Now?

 

1. In announcing plans for a 1.75-cent-per-ounce soda tax last week, Mayor Ed Murray emphasized what he considers the nexus between sugary soda consumption (which has disproportionate impacts on low-income and minority communities) and what the tax will fund (programs that attempt to close the education and opportunity gap in those communities). As he did during his State of the City speech in February, Murray placed a particular emphasis on improving outcomes for young black men in Seattle Public Schools, by expanding mentoring programs aimed at keeping black male teenagers in school and out of the school-to-prison pipeline. The city’s program, Our Best, is based on an Obama-era program called My Brother’s Keeper that was widely criticized for focusing on male achievement while ignoring the specific, and different, challenges facing young black women. For example, African American Policy Forum director Kimberlé Williams Crenshaw wrote in the New York Times that young black women are more likely than other young women to be victims of sexual violence, become pregnant at a young age, get suspended from school, die violently, and be victims of sex trafficking than other girls. “The disparities among girls of different races are sometimes even greater than among boys.”

Crenshaw notes that “supporters of My Brother’s Keeper use the analogy of ‘the canary in the coal mine‘ to justify both a narrow focus on individual-level interventions — as opposed to systemic policies to narrow the persistent racial gaps in education, income and wealth — and the exclusion of women and girls. Black boys are the miner’s canary, the argument goes, and so efforts to save them will trickle down to everyone else.”

When I asked Murray last week why he, like Obama, planned to emphasize young black men to the exclusion of young black women, his response was straight out of the Obama playbook. “Lots of the programs I listed—STEM, extracurricular activity programs, and other programs that will be enhanced—those are for young men and young women in our high schools,” Murray said. “They’re not limited to just men.”

Dwane Chappelle, director of the city’s Department of Education and Early Learning, jumped in. “At Aki Kurose Middle School, they are doing My Brother’s Keeper for young black men, but they’re also focusing on young black women and Hispanic women as well, making sure that students are all taken care of. They just use the My Brother’s Keeper framework” for both boys and, Chappelle said. But when I asked Chappelle whether the Aki Kurose program focuses on problems that are specific to girls, like teen pregnancy, he said he didn’t know the specifics.

2. A neighborhood effort to prohibit a four-story, 57-unit apartment building from going in along a commercial stretch of Greenwood, where the zoning has allowed apartments for many years, has passed the point of absurdity and is becoming downright surreal. Neighbors of the development, which is located right next to the frequent Route 5 bus line, argue that its residents will have to have cars because they won’t have access to transit, that by building small apartments, the developers are trying to “force” people to live in “Soviet-Union-like” dwellings, that it is “inhumane and unacceptable” for people to live without air conditioning in Seattle, and that a small garden on the roof would be an invitation for renters to “party” and cause disturbances.

Encouraged by a city planning and development department that subjects small projects like this one to design review, and the passivity of a design review board that failed to challenge or reject any of their complaints (virtually none of them the province of design review), the residents filed a challenge to the building under the State Environmental Policy Act, arguing, among other things, that the apartments will inconvenience neighbors by making it harder for them to park their cars.

livablephinney.org

Last week, the group opposing the building, which calls itself (of course) Livable Phinney, released the list of witnesses they would like to hear from and exhibits they hope to introduce at their first appearance before the city’s hearing examiner. (That hearing examiner, Sue Tanner, recently found in favor of Queen Anne homeowners who argued that allowing people to build mother-in-law apartments would harm the environment by, among other things, making it harder for people to park their cars.) A typical witness list might include five or six witnesses; Livable Phinney’s includes a dozen, plus 47 separate exhibits. The proposed witnesses include a Metro employee who will testify that Metro’s Route 5 is often behind schedule, making it less than “frequent,” an architect who will testify that the new apartments will create shadows on a nearby high-end condominium complex, a resident of that complex, and several nearby neighbors who oppose the project. The hearing, which is expected to last three days, starts on Tuesday.

3. Washington State Wire, which “relaunched” in January after several years as a conservative-leaning blog whose chief writer, Erik Smith, now works for the Republican-led Majority Coalition Caucus, has given consultant John Wyble a weekly column, where, last week, he tried to explain his client Mike McGinn’s perplexing campaign slogan, “Keep Seattle.” Says Wyble: “It simply means keep Seattle a welcoming place for all.”

Wyble continues: “I understand that this shorthand phrase could be confused with nostalgia. I remember riding in my Dad’s Ford Falcon along Boeing Field in the early 70s when Seattle was a blue-collar scrappy fishing town and SeaFair was the biggest event of the year. While I remember that fondly, this campaign knows that cities evolve and change. But for who?

“This is a campaign about keeping the promise of a great city for every person who lives in it.”

I guess that… clears that up?

Washington State Wire editor DJ Wilson says Wyble will write a total of eight columns for the website. No word yet on whether they plan to give equal time to consultants or spokespeople for the other mayoral campaigns.

4. David Preston and Harley Lever, two of the activists behind the Safe Seattle Facebook group, announced on their Facebook page that they plan to announce their candidacies for unspecified city offices this afternoon. (I’m guessing council Position 8 and mayor.) Anyone who reads my Twitter feed has a pretty good sense of my thoughts on Preston, who has mocked me relentlessly and even filed a frivolous city ethics complaint after I published a public record that showed another activist in an unflattering light, but you can find out even more about him by Googling his name and checking out his web page, which is a pastiche of conspiracy theories, images of city council aides and other private citizens lifted from their Facebook pages and Photoshopped, and overwrought imitations of hard-boiled journalism, minus the journalism.  You can also check out the video of his appearance before a flabbergasted Ethics and Elections Commission, starting around the two-minute mark.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site! 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 substantial time I put into reporting and writing for this blog and on social media, as well as costs like transportation, equipment, travel costs, website maintenance, and other expenses associated with my reporting. Thank you for reading, and I’m truly grateful for your support.

 

Morning Crank: “Let’s Actually Do It.”

1. For a few weeks, a rumor has been going around that Scott Lindsay, Mayor Ed Murray’s public safety advisor and the most vocal defender of encampment sweeps in the mayor’s office, was thinking of running for city attorney against longtime incumbent Pete Holmes. Yesterday, Lindsay put those rumors to rest, announcing that not only is he running, he’s leaving the mayor’s office in one week, presumably to campaign full-time. Perhaps most interesting, Lindsay’s announcement included two unlikely endorsements, from Mothers for Police Accountability founder Rev. Harriet Walden and Public Defender Association director Lisa Daugaard. Walden is a longtime police accountability advocate and Daugaard has been highly critical of Murray’s homeless encampment sweeps; both serve on the Community Police Commission, the civilian body that oversees police reform efforts at the city.

Daugaard’s decision to support Lindsay is surprising not only because she supported Holmes in the past (over two campaign cycles, Daugaard  contributed $246 to Holmes’ campaigns), but because Lindsay is widely seen as a law-and-order guy and a strong defender of Murray’s encampment removal policies. (Shortly after Lindsay announced, Safe Seattle—a group opposed to homeless encampments, safe drug-consumption sites, and Murray’s pro-density policies—sung his praises on their Facebook page.

I asked Daugaard why she was supporting Lindsay. Her response: “We need to do more with the office of City Attorney. We’re entering an era when we had better be doing things worth defending here in Seattle. If we’re saying safe consumption [sites for drug users], let’s do it. If we’re saying we can care for people and reduce crime through community based alternatives, let’s actually do it.

“Scott’s analysis that we can take a more serious approach to all of these issues is correct. I haven’t always agreed with him and that may continue, but I respect his energy and openness to evidence about it what works.”

Daugaard says she’s concerned that after eight years with Holmes as city attorney, misdemeanor defendants “still serve long sentences on cases with excessive probation, are held in lieu of bail because they are poor, and are made to give up their trial rights to get services in too many cases. Jail utilization has climbed.”

“I give Pete great credit for hiring Kelly Harris as his criminal division chief last year. Kelly has made important improvements. But we need to get serious about making more effective city wide use of community based diversion. This has to work—we don’t have an infinite time frame to get it right and take it to scale. Scott is very serious about showing that we can achieve strong neighborhood-level outcomes through a public health-based approach. We need that kind of energy or people are going to get fed up.”

Murray’s campaign confirms that he will continue to support Holmes, whom he endorsed before Lindsay got in the race. The timing of Lindsay’s announcement puts Murray, who is running for reelection himself amid allegations that he sexually abused teenage boys in the 1980s, in a tough position—having a top staffer abandon ship during a tough reelection campaign does not exactly inspire confidence.

There may be another reason Lindsay decided to leave Murray in the lurch: Because polling suggested he could win. So far, Lindsay has reported one expenditure: A $20,000 phone poll, conducted between April 21 and April 23.

2. Four years after denouncing a soda tax proposal by his then- (and future) opponent, Mike McGinn (and getting trounced by his opponents as a shill for the beverage industry) on soda and sugar-sweetened beverages, Mayor Murray rolled out the details of his own soda tax proposal Thursday. The proposal would impose a 1.75-cent-per-ounce on all sodas, including diet sodas, to be paid by soda distributors, who would almost certainly pass the cost on to customers. (This, I should note, hits Crank where she lives. Don’t mess with my garbage water, Mr. Mayor, SIR.)

The money—an estimated $18 million a year, depreciated from the $23 million the city budget office estimates it would taken in on current soda sales to account for the fact that soda taxes reduce consumption—would pay for programs that support education and access to healthy food in low-income communities, including: $469,000 a year to expand school-based mentorships; $1.1 million a year for workplace learning programs for kids in high school; $1.1 million a year for case management and training to reduce racial disparities in discipline; and a one-time investment of $5 million to create an endowment that, Murray said Thursday, will provide “one free year of college at Seattle colleges [formerly known as community colleges] to all public schools students who graduate.”

Acknowledging that a soda tax is regressive—not only does it hit lower-income people hardest, lower-income people buy more soda—Murray said, “To those who say that we are resorting to a regressive tax, I say, you know what is more regressive? You know what is really taking money out of African American communities? Tolerating an education system that is failing students of color every day and leaving them without a future and giving them food that will only lead to health problems.” Excessive soda consumption has been linked to obesity, diabetes, and heart and liver problems, Murray noted. Murray said he decided to include diet soda in the tax for equity reasons—higher-income white people are more likely to drink diet soda than sugar-sweetened drinks—but the expansion to diet drinks also allowed him to lower the tax slightly from the 2-cents-per-ounce tax he originally proposed in his State of the City speech in February.

The soda tax requires council approval; two council members, Rob Johnson and Tim Burgess, flanked Murray at yesterday’s press conference.

Immediately after Murray’s press conference, a group of Teamsters and other soda-tax opponents gathered in the lobby of City Hall to denounce the proposal.  Pete Lamb, a representative from Teamsters Local 174, said similar taxes had already forced companies like Coca-Cola and Pepsi to cut jobs in Philadelphia, where a 1.5-cent-per-ounce tax on soda went into effect this year. (The mayor of Philadelphia pointed out that the two companies saw gross profits of more than $6 billion last year, and called the company- and union-led efforts to blame the tax for layoffs a “new low.”) “We will not support a tax that puts our members’ jobs on the line,” Lamb said.

“Just in the soda and beverage industry alone, we have 1,200 to 1,300 workers, plus distributors and warehouse workers—when you really look at the full scope of it, you’re looking at thousands of jobs being potentially impacted,” Lamb said. “We support … working to combat obesity, but to just target soda when we have so many things in our food chain that are sugary—we can’t support that.”

Interesting foot note: The spokesman for the soda tax campaign, the Seattle Healthy Kids Coalition, is Aaron Pickus—the longtime spokesman for former Mayor McGinn, who proposed the original soda tax four years ago.

3. This morning, the city will once again remove a persistent unauthorized encampment above the Ballard Locks and provide its residents with information about open shelter beds and services in the hopes that some will accept their offers. The Locks encampment has been swept numerous times thanks in large part to repeated complaints by Ballard residents about garbage and erosion at the site.

George Scarola, Murray’s homelessness director, acknowledged Thursday that “of course [the decision to clear a particular encampment] is in part based on complaints. He says the Locks encampment is a “longstanding issue—as long as I’ve been here, I’ve heard people complain about it.” But, he says, the city is getting better about offering real services and shelter, rather than simply directing people to line up at bare-bones shelters downtown. “Are we simply moving people from one place to another? We are doing some of that,” Scarola acknowledges. But, he says, “We are getting 40 percent who are accepting services.” And “moving people around is somewhat useful, because we can remove some of the garbage,” which is a major source of neighborhood complaints.

The sweep begins at 8:30 this morning.

4. A new website that includes a petition to “recruit” 2016 Republican. gubernatorial candidate Bill Bryant for mayor appears to be the handiwork of Matthew Donnellan, Bryant’s campaign manager in his unsuccessful effort to unseat Democratic Gov. Jay Inslee last year. Although the owner of the site paid to register it through a service that hides site owner identity, Ben Krokower of  the consulting firm Strategies 360 noticed Donnellan’s name in the source code and pointed it out on Twitter. Bill Bryant received 32 percent of the vote in King County in his race for governor.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site! 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 substantial time I put into reporting and writing for this blog and on social media, as well as costs like transportation, equipment, travel costs, website maintenance, and other expenses associated with my reporting. Thank you for reading, and I’m truly grateful foryour support.

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