Spending on infrastructure — bridges, sewers, roadways — is often touted as a way out of a recession. But the argument quickly runs into the objection that most of these big projects (think Seattle's Viaduct) take forever to get the cash flowing into the system. But that may be changing. A deep recession lasts long enough to gain from infrastructure spending.
So, look to local politicians to start tying our long-stalled infrastructure projects to economic recovery. Maybe not on the level of China's just-announced $586 billion program over the next two years, but generous nonetheless. What's ready to go locally?
Sound Transit and Seattle and Bellevue Parks, thanks to voter-approved measures, will be able to keep the money flowing. Another voter-backed issue, the Pike Place Market, could also be fast-tracked. The Convention Center in Seattle is hard at work exploring plans for a doubling of its size, adding a stand-alone facility near the present one; but this one might get mired in Seattle planning process. That process will also continue to bog down plans for a new floating bridge on SR 520 and the Alaskan Way Viaduct. On the other hand, the urgency to create jobs might get at least one of those mega-projects unstuck. The floating bridge, largely because of the lobbying pressure from Microsoft, could be the first to move, perhaps with money diverted from the central waterfront project, still stalemated between the state and Seattle planners.
The China program ranges far from the usual spending on transportation, water supply, and rural electrification. It also includes massive spending on low-income housing, health, and education. Such an approach broadens the coalition and might be a good idea locally as well. House Speaker Frank Chopp, for instance, often links his approval for pet projects to increases in his pet project: low-income housing. Spending more on measures that reduce carbon emissions and help clean up Puget Sound would also make political sense.
A final reason for expecting an infrastructure boom is that these projects finesse pledges not to raise taxes, since they are bond issues paid for during the next 30 years. This might be one way for Gov. Gregoire, who always feels the need to pledge no tax increases when running, to wriggle out of the box she put herself into.
Spending on infrastructure makes a lot of sense as public policy. It creates jobs. It invests in future efficiency (as opposed to consumer stimulus that has no lasting value). It can help ordinary citizens (as opposed to bailing out investment banks). The problems, aside from delays, are the undignified legislative scramble in putting together such a package, laden with earmarks for silly projects, and the extravagent labor costs for public projects.
Later this month, for instance, the third runway at SeaTac opens — eight years late, 20 years in the planning, 20 lawsuits later, and costing $1 billion (compared to early estimates of $430 million). Oh, and now that airlines are cutting back due to high fuel prices and consolidations, there's some question of whether it was even needed. It's not exactly a confidence-builder for the politics of infrastructure.
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Comments:
Posted Sun, Nov 9, 1:19 p.m. Inappropriate
“Continued constructive policies promoting the economic recovery of the country must be the paramount duty of the Government. …Institutions and men may have resources and credit but unless they have confidence progress is halting and insecure.
”There are three definite directions in which action by the Government at once can contribute to strengthen further the forces of recovery by strengthening of confidence. They are the necessary foundations to any other action, and their accomplishment would at once promote employment and increase prices.
”The first of these directions of action is the continuing reduction of all Government expenditures, whether national, State, or local. The difficulties of the country demand undiminished efforts toward economy in government...”
James Veseley, The Seattle Times, November 9, 2008.
No actually not, though you might think so. The correct answer is:
Herbert Hoover, President of the United States
Annual Message to the Congress on the State of the Union.
December 6, 1932
Posted Sun, Nov 9, 6:01 p.m. Inappropriate
The Washington State Task Force on Local Funding Options in King County meets December 1st, at Bellevue City Hall.
There will be proposals for projects that could start right away, and not get bogged down in planning, using existing taxes that can not be scooped up and used to fill general fund holes (not anymore).
Does the WSCTC know when, or how much yet? Double the size and near the current location is more information than they had 3 months ago. I look forward to seeing their proposal.
Posted Tue, Nov 11, 11:39 a.m. Inappropriate
I hope that when the convention center plans, it plans BIG for the expansion. The property inside the trapazoid of 9th Ave., Boren Ave., Pine St., & Howell St.
It'd be great if besides the above area, the whole block inside 8th Ave., 9th Ave., Pine St., and Olive St couldn't also be used. You could build a second skybridge connecting all three buildings.
David, please keep posting on convention center expansion plans in the future.
Cheers
Isaac
Posted Tue, Nov 11, 8:02 p.m. Inappropriate
"Later this month, for instance, the third runway at SeaTac opens — eight years late, 20 years in the planning, 20 lawsuits later, and costing $1 billion (compared to early estimates of $430 million). Oh, and now that airlines are cutting back due to high fuel prices and consolidations, there's some question of whether it was even needed."
Just like Sound Transit's light rail. Unbelieveably expensive. Takes decades to complete.
And not needed.
Utter waste of money.
Posted Tue, Nov 11, 8:05 p.m. Inappropriate
Let's keep in mind that all tax revenues, including hotel taxes and restaurant/bar taxes, are falling at a very fast rate. The amount of money available from any tax is going to be far less next year than had been expected. So there really won't be nearly as much money coming in to spend on infrastructure -- or anything else -- as is being anticipated.
I suggest spending any "extra" hotel tax revenues to hire more Seattle police officers. That creates jobs. And in recessions, crime rates usually rise dramatically, so more police are needed. We need more police in this city even if there were not a recession.
Posted Wed, Nov 12, 6:09 p.m. Inappropriate
construction workers commit fewer crimes while working, pay taxes that pay for police, and there is some thing when they are done, otherwise you are left with unemployment insurance being payed and a higher unemployment rate.
Building stuff has a greater dollar for dollar return.
It also would not require a change in state law, and it would not unfairly burdon the hotel industry, being impacted by a higher sales tax rare than tin foil used to make hats for talk radio listeners.
Posted Thu, Nov 13, 9:57 a.m. Inappropriate
From today's P.I.:
"THE ASSOCIATED PRESS
OLYMPIA, Wash. -- State tax revenue in October was $53 million less than expected.
A Washington Revenue Forecast Council report says sales tax receipts and other sources were nearly 6 percent below the level for the same month last year as retail trade declined.
The report says car dealers were down 21 percent, furniture stores 12 percent and clothing stores 9 percent. October real estate tax receipts were 41 percent below the level a year ago."
The same decline is going to happen in hotel revenues, if it has not already. These declines in tax revenues are going to get much worse, before they start getting better.
It's very doubtful that there will be any "extra" revenue from the hotel tax. With this sort of revenue decline, many fundamental government services are going to have to be cut. How stupid to waste scarce tax dollars building an arena for pro sports which are owned by some of the richest billionaires in the country. Let the billionaires spend their own money to build their own facilities.
We need all the falling tax revenues we have to try to maintain basic services, such as police, firemen, road repair and maintenance, schools, etc.
It is never a good time to waste tax revenues on frills that only a tiny minority of the public can utilize, such as a remodeled NBA arena (Sonics tickets averaged over $50 per game last year.) With the economy in a recession that is expected to last years, there are bound to be many fewer people who could afford to buy tickets for pro sports in the coming decade than there were in the past decade.
The "burden" on the hotel industry would not change, no matter what the tax revenue is spent on. Nobody is suggesting increasing the hotel tax. The debate is over what the current hotel tax should be spent on.