Seattle's money madness

The region is facing an economic slowdown, multiple budget crises, and big tax increases. Without a rapid, realistic response by voters and policy makers, November could be ugly.
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2014: The year $15 an hour came to Seattle.

The region is facing an economic slowdown, multiple budget crises, and big tax increases. Without a rapid, realistic response by voters and policy makers, November could be ugly.

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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About the Authors & Contributors

Knute Berger

Knute Berger

Knute “Mossback” Berger is Crosscut's Editor-at-Large.