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We're headed for some economic tough times — and tough decisions — as our growth-oriented profligacy catches up with us during what looks like an extended downturn. One big problem here in Seattle: Government at all levels is running out of money.
Gov. Chris Gregoire is freezing state hiring and unnecessary travel while the state faces an estimated $2.7 billion deficit in its next biennial budget. King County is facing an $87 million budget hole next year, and one County Council member, Larry Phillips, who is likely to run for county executive, has worried that the general fund is in "free fall."
On top of that, Metro Transit is running out of money due to decreased sales tax revenue just at the time when bus riders need it most. The tax gap is $40 million per year looking ahead. A planned October fare hike of 25 cents might be boosted even higher — only a year after the last 25 cent increase was approved — and service cuts are on the table.
The city of Seattle is also facing financial woes with a $50 million budget gap looming, though it has found at least one new revenue source: taxing grocery bags. Late last week, another announcement: Seattle Public Utilities wants to raise rates by 29 percent for garbage collection and 18 percent for water. The Seattle Times says that's a 46 percent increase in garbage rates over two years for a single family and a 40 percent increase for water over three years. That's a huge hit to Seattle households, and renters can expect such fee hikes to roll downhill and be added to utility bills and already high rents.
At the same time, the November ballot is already packed with spendy items, including a colossal $20 billion Sound Transit plan that would soak up every available dime for an expansion of light rail. It would significantly boost the already regressive sales tax. The Pike Place Market needs fixing, to the tune of $73 million, and a property tax increase would also raise $146 million more for parks.
Months ago, politicians seemed reluctant to lard up the ballot with requests for money but weirdly lost their shyness as things got worse. The theory is that Obama-happy young voters will turn out in droves and gladly pass any progressive sounding measure, no matter what the price tag. Apparently, the subprime-loan spending mentality is alive and well as the public is enticed to over-reach.
Unfortunately, the consequences of over-reach will affect everyone, not just those who think they can afford a highly mortgaged future. I live in a Seattle apartment complex with a fair number of fixed-income retirees, many elderly single women. Even good Democrats among them are appalled at the current state of affairs, and they are panicky. One, an Obama supporter, railed at the bus stop about bus fare increases and the Sound Transit proposal. Another stopped to ask me how much I had paid at the neighborhood supermarket for my fine canvas grocery tote bag. When I said $7, she turned white with a "where-am-I-going-to-get-an-extra-$7" look and scurried off in anger mumbling about never shopping there again before I could explain there are cheaper options.
Liberals should be cautious about creating a backlash at the polls that could hurt. The state's economic woes play right into GOP gubernatorial challenger Dino Rossi's fiscally conservative hands, and the race with Democrat Gregoire is tight. As we learned in 2004, there were John Kerry/Rossi voters, and there could well be Obama/Rossi voters in 2008 as pocketbooks get pinched.
Democrats are hoping for a down-ticket sweep, but if voters peel off high on the ballot to vote for Rossi, it will have ripple effects down the food chain. At the very least, they'd like to see no ticket splitting before Republican state Attorney General Rob McKenna, and in a hoped-for-landslide year, it might not happen until after lands commissioner, in which case Democrats could essentially sweep statewide offices.
In addition, a frustrated public might turn to the cleverly designed Tim Eyman-sponsored Initiative 985 because it offers some incremental, quick road-traffic improvements with no new taxes, plus it places limits on future road tolling. No, his proposal isn't mass transit, but it does addresses the biggest concern that most drivers have, which is congestion. You can argue that it does something about gridlock and blessedly doesn't carry a $20 billion price tag.
And with the glut of fiscal woes and higher fees and taxes, plus the ongoing frustration with inflation on basics like food, gas, and health care, over-reach could also bring backlash that hurts much-delayed unglamorous spending measures (like fixing the Market). This was one of the main reasons for keeping Sound Transit off the fall ballot, so it wouldn't poison the well. It might not: Sound Transit has been saved in the past by "we've-got-to-do-something" emotionalism. On the other hand, given other more immediate needs in the city and region, anger over $4-plus gas might ease when compared to skyrocketing taxes on top of inflation and recession.
Fiscal decision-making has got to get back in line with the way most people are living. The current situation is madness. Tax and fee increases and budget holes need to be dealt with by looking at the whole picture. Many people have been priced out of the city or into a corner by rising prices and a cost of living in Seattle that is way too high. For some, $7 buys a cool, re-useable shopping bag, but for others it's the last straw.
If we're going to have to cough up for higher basics like bus fares, water, and garbage, let's figure out places to save. An easy start is to limit new spending. We have to live within our means and scale back ambitions so that those below the median income can still afford to live here. That means cutting back and tightening the belt, being selective about new initiatives, and demanding our electeds look out for the little guy, who doesn't want to get priced off the bus or out of the supermarket.
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Comments:
Posted Wed, Aug 6, 6:59 a.m. Inappropriate
$7 for a shopping bag?: I have four. They were all free. They work great.
I know of no economist who is predicting a sustained downturn here. And the data shows that the economy here is performing far better than the rest of the country.
Who would pay $7 for a canvas shopping bag?
That must be some shopping bag.
Posted Wed, Aug 6, 7:44 a.m. Inappropriate
Major savings!: Hey, big spenders,
Retrofit the Viaduct (including the southern 40% proposed to be demolished)for $1 billion max, and take the cost savings of $1 billion and transfer them to help out the budget for the 520 bridge replacement which would lower if not eliminate the need for tolls.
Art
Posted Wed, Aug 6, 9:48 a.m. Inappropriate
No shortage of money: The State had a huge surplus last year and still raised taxes at an unprecedented rate. Now Gregoire pleads poverty. There is no shortage of money for government. What's lacking is the discipline to not throw dollars at every feel-good project that every paternalistic legislator pulls out of a hat. To read what was passed by the Legislature in the last session is appalling.
Posted Wed, Aug 6, 11:15 a.m. Inappropriate
Sales tax to 12% or more: Our regressive sales tax inevitably is headed into the teens. Simple reason: It applies to a part of our economy that while growing in nominal terms is shrinking in relative terms or share.
It is as simple as goods versus services. The latter is a growing share of our economy, and is not subject to sales tax. The former, on which the poor spend a relatively larger share of their income, has to bear the brunt of the tax burden.
An ideal tax has a very wide base and a very low rate -- and is rewarded with near universal compliance. Washington's tax base in relative terms is shrinking, so rates are heaed to the moon.
One result is a strong incentive to cheat, especially in border areas (e.g., Vancouver, Spokane) where access is easy to no-tax or low-tax alternatives (Oregon, Idaho).
An income tax would be more fair. But our political class has poisoned the well by spending every red cent when times are good, then pleading poverty and tax increases when times go soft. No surprise, then, that voters prefer the devil they know -- the regressive pay-as-you-go sales tax -- to the devil of an income tax.
Posted Wed, Aug 6, 11:19 a.m. Inappropriate
Roll back: I'm in favor of rolling back the massive pay increases given to state employees and teachers over the last four years. If the state employees and teachers don't like it, they can get jobs in the real (ie, non-governmental) world, where people get paid for performance.
Posted Wed, Aug 6, 11:34 a.m. Inappropriate
Unnecessary travel: "Gov. Chris Gregoire is freezing state hiring and unnecessary travel"
Why was there unnecessary travel before? We have to quit spending like drunk congressmen.
Posted Wed, Aug 6, 1:13 p.m. Inappropriate
800 POUND "PICK-POCKETS" BEWARE: Good article! We've been riding the good times for too long now, and it seems a gaggle of chickens are now coming home to roost. Local, Regional, and State agencies are all seeing red on the ledger sheets, and trying to come to grips with the current realities.
A telling vote will occur in November with both I-895 (Tim's latest child), and Sound Transits 20+ Billion light rail proposal. With energy costs going through the roof, along with most everything else we depend on, it seems that I-895, catering to congestion relief "NOW", and Sound Transits train to Overlake and Lynnwood by the 2020 or 2030 are on completely different sides of the same issue. My guess is most voters will vote with there pocketbooks and say yes to congestion relief for no new taxes, and a big NO to Sound Transits next generation startup of a plan that costs each household about $15,000.00.
Doug MacDonald, former Transportation Secretary, in a recent series in Crosscut should be required reading for the voters guide. He lays out a very convincing argument for buses and bus rapid transit corridors, combined with regional planning policies that can be phased in starting NOW, for much less money.
Global Warming, and green house gas emissions should be at the forefront of everyones agenda. Politics aside, if we get this one wrong, were all in the same boat -- the one that is sinking as the tide rolls in. We need to invest our tax dollars wisely from here on out. Building a hugely expensive light rail system that barely increases transits share of all trips made over the next several decades is foolish. The lavish plan for rail actually generates more greenhouse gas than it saves, considering traffic and construction emmisions during build-out.
Thank god most voters will get this one right!
Posted Wed, Aug 6, 2:13 p.m. Inappropriate
RE: 800 POUND "PICK-POCKETS" BEWARE: Wow, I've read a ton of disinformation and lies spewed by Kemper Freeman's anti-transit camp on grumpy old Crosscut; but "LRT?" wins the prize this time.
So, we're going to solve global warming by getting rid of HOV lanes (the only thing which makes buses faster than walking) and encouraging more people to drive?
Is there a particular drug I need to ingest to make this crazy stuff make sense?
As for Skip Berger: I believe his ultimate goal is gridlock and de-population. So, naturally, more mobility options for a growing region = a waste of money. Who cares about getting people to work, anyways? Right?
Posted Wed, Aug 6, 4:22 p.m. Inappropriate
RE: Madisonave: The article was about tough choices facing government and people. As you choose to read your own story "between the lines", then I must respond to the only fact you gave. (buses without HOV are slower than walking) OK, here goes!
Metro bus 194 takes 27 min. from downtown Seattle to the Airport 'terminal', for an average speed of 33 mph. Average walkers move at about 2-3 mph.(me 1, you nothing)
BTW, Sound Transit's poster child, Link Light Rail to Seatac Airport in 2010, will take 39 min. including the 1/4 mile walk from HWY99 to the same 'terminal', for an average speed of 23 mph.
Having driven the 194 hundreds of times, at all hours of the day, I rarely used the HOV lane, as it isn't needed, except for commute hours - sometimes. It is the long distant commute buses that rely on HOV lanes, and most of them are during the commute hours where general purpose traffic is not allowed. Opening the HOV lane for GP traffic allows all vehicles to pick up the pace, where they get better milage, and spew fewer gases.
Posted Wed, Aug 6, 5:09 p.m. Inappropriate
RE: oll back: Those "massive pay increases" for state teachers — community college instructors, anyway — merely brought them up to a slightly more livable wage. I know several teachers who take on extra classes in addition to their full-time loads as a matter of course, just to make ends meet. As a full-time instructor with tenure and eight years of experience, my salary was only $36,000 per year. When I left teaching to enter the "real world," as you say, I secured a corporate job in a related field (Note: I am not referring to my current job as a Crosscut editor) that paid $59,000, plus bonuses for my individual performance as well as that of my group. As a teacher, I was never entitled to better pay in recognition of my merit or work above and beyond the call. This fallacy that state-employed teachers get paid too much for highly demanding work that frequently stretches into evenings and weekends really needs to cease. I left in part because, in answer to our request for better pay, a member of the college's board of directors said, "If teachers think they deserve more, they can see what they can get on the open market." Well, I did, and it was a lot more than what I'd made as a teacher, and I never worked weekends.
Posted Wed, Aug 6, 6:33 p.m. Inappropriate
RE: Madisonave: Oh, I get it. You're a bus driver concerned LRT is going to make your lousy, unreliable, packed, uncomfortable and inconvenient bus look second class.
Like most anti-rail ideologues, you're grinding some axe - totally unrelated to addressing the challenges at hand, and into the future. Light rail to the airport is 90% complete. Get over it. You lost. Move on. How perfect is it you latched on to Doug MacDonald, a guy driven by nothing but grudges. As DOT Secretary and Sound Transit commission member, MacDonald had plenty of chances to raise (if not enact) one of the dozens of ridiculous concepts or policies he hit on in his Crosscut diatribes. But the guy didn't jump on the anti-transit bandwagon (more like SUV) until he got forced out of his job...and got turned down after pursuing another one. Surprisingly, the absurd "gulp down your bus medicine" concepts didn't emerge until MacDonald got the boot. Gotta blame somebody, right? Check Ron Sims mimicking this tired finger-pointing exercise, as he tries to blame light rail for his own policy failures.
PSRC shows travel times degrading over time on I-5 in the coming years. Nothing like rushing to catch a flight or get to a business meeting when you're sitting in a parking lot behind a diesel spill. Or accident. Or some dude who forgot to fill up his gas tank.
A bus driver who doesn't think HOV lanes are useful.
And I thought I had seen every kooky perspective out there.
Posted Wed, Aug 6, 9:09 p.m. Inappropriate
mossback debt: It blows me away how we can go from a realatively ballanced budget to 2.5 bil in debt in 6 months. I couldn't do that ratio with my budget if I tried unless I just quit work(collecting taxs). Something is wrong here. I am not denying a debt/income problem but some explanation needs to be put out besides just giant scary numbers.
Posted Wed, Aug 6, 9:18 p.m. Inappropriate
Yes on I-985; No on everything else!!: Congestion occurs when certain freeway entrances and lanes are banned for single occupancy drivers. Vote Yes on I-985. Vote 'NO' on all unnecessary, non-emergency November, 2008, tax increases. None of them address 520 and the viaduct. Time to save ourselves a whole lot of money.
Posted Wed, Aug 6, 10:49 p.m. Inappropriate
RE: oll back: Lisa -
Here's my suggestion --- roll back the massive pay increases that Gov Gregoire gave teachers as salary entitlements. Take all of those dollars and put them in a pool, and give them to the teachers based on merit. Not based on tenure. Not on hours spent. But on results. Results!!!
I live in the real world. If I perform, then I am rewarded. Nobody cares --- or should care --- how long I've been working. If I want to be compensated I have to deliver results.
That's all I'm asking of teachers. No results --- no raise. Poor performance --- fired.
Is that too much to ask for our tax dollars?
-pjs
Posted Thu, Aug 7, 9:20 a.m. Inappropriate
RE: Yes on I-985; No on everything else!!: What is it with all the transportation troglodytes who follow the mindless populism of Skip Berger and Dori Monson (did you catch Dreary Monson on the air two weeks ago, when he spent a full hour weaving one of the most inane conspiracy theories in the history of hysterical talk radio? It goes like this: the DOT is "without a doubt" "manufacturing" traffic jams to ensure Sound Transit gets another tax increase. The proof? Recent construction work on 405 and I-5.)
LRT? and Skip Berger have real smart cookies waging their anti-transit wars.
Thanks to Internet archives, someday we can all sit back and laugh at these sophomoric absurdities.
Posted Thu, Aug 7, 1:10 p.m. Inappropriate
RE: Yes on I-985; No on everything else!!: You're equating Mossback with this?
Posted Mon, Aug 11, 5:26 p.m. Inappropriate
How Seattle Used to Be-: Seattle used to be a pretty nice place to live- and in many ways it still is. However, now too many people are squeezed into what used to be a favorable footprint between the mountains & Puget Sound. As for me, I'm a Seattle native- I saw it all happen. Jerry Gropp Architect AIA PS
Posted Tue, Aug 12, 5:19 p.m. Inappropriate
She Spent Your Salary on Light Rail: Got a complaint? Fire Gregoire.
$2.7 billion equals the cost of the boondoggle Lite Rail system (which not there's higher unemployment will be used by even less people).
Posted Wed, Aug 13, 1:19 p.m. Inappropriate
RE: Yes on I-985; No on everything else!!: Excess demand to roadways during peak hours is the real problem, to which congestion is the most feasible solution. The more we make it difficult for ourselves to use alternative forms of transit, the more we shoot ourselves in the foot. HOV lanes in our area on average carry more people than adjacent lanes, reduce CO2 emissions and conserve gas. This is reality. A vote for I-985 is a vote to increase congestion.
Massively expensive automobile infrastructure like 520 needs to be tolled, just like massively expensive rail infrastructure like Central link needs fares. Those who use it the most ought to pay more for it. Tim Eyman has no business micromanaging this matter.
I'm not sure I'm entirely against this proposal. It could make congestion on the freeways so bad that demand will SKYROCKET for true alternatives like right of way for rail. I'll say no though, because I don't want your engines idling as you sit in traffic giving my neighborhood respitory problems.
Posted Sat, Aug 16, 9:34 a.m. Inappropriate
RE: She Spent Your Salary on Light Rail: I agree. The astonishing lack of leadership by Gov Gregoire --- as well as the last several governors --- on the state's transportation issues approaches criminality. Throw the bum out!