City budgeting: Isn't it strange?

Seattle thought maybe it was too smart to suffer a recession. Now, political leaders bring their own agendas to deciding how to respond to a real loss of revenue.

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Mike McGinn, while campaigning in 2009. How much do campaign priorities dictate budget choices?

Seattle thought maybe it was too smart to suffer a recession. Now, political leaders bring their own agendas to deciding how to respond to a real loss of revenue.

The world recession, as it turns out, is as much about political philosophy as it is about money.  A near-rebellion in Greece and, now, one in France feature populations who don’t want to give up government support.  Opposition in these nations question the core values of politicians in power.   France and Spain admit they have borrowed heavily to build all the new transportation infrastructure, high speed trains, subways, long tunnels, and, of course, extensive social services along with generous retirement packages for its citizens.

Here in Seattle, many thought we were so smart that we would be immune to a recession.  Our current budget crisis, however, may have reached a point that is sending warning signals to those who have never before taken cumulative debt or finance seriously.

With the prospect of anticipated debt for a series of bridge replacements, a tunnel, a seawall, and mass transit, even progressives are beginning to question if we are digging a debt hole so deep we can't climb out.  Add to that a city with a several decades of not being able to say "no" to city amenities and generous labor contracts for its employees.  A financial day of reckoning is now looming over us like a dark cloud.

Referring to generous pay for city workers, former council member Peter Steinbrueck, after being given an overview of Seattle's public employee pay scale, commented at a neighborhood meeting, "Council members never see that kind of data."  Fiscal responsibility are words the typical Seattleite seldom hears.

Maybe we haven't been as smart as we thought.

Why the realities of debt and fiscal responsibility haven’t been high on the radar of Seattleites may be related to a factoid released by the The Puget Sound Business Journal.  They report that there are an estimated 90,000 millionaires in and around Seattle.  So many, in fact, that the wealth management industry has become one of the region's biggest businesses, managing $315 billion in the assets of local billionaires. Maybe they can afford the higher cost of living here and just don’t raise a fuss by calling the mayor or city council.

Concerning the proposed new city budget, the mayor supposedly made his budget decisions through the lens of three overarching priorities.  He would:

  • Emphasize sustainable changes over one-time cuts.
  • Seek internal savings in order to preserve direct services.
  • Identify opportunities to streamline management functions.

The mayor at his budget press conference claimed his budget proposals protect core city services related to public safety and essential human services — certainly what many wanted to hear.

One floor down in City Hall, the city council last August developed a list of four priorities, where budget cuts should and should not be made.  First on their list was to protect the health and safety of all Seattleites, while providing help to the city's most needy.  They emphasized that police and fire protection should not be reduced, especially in neighborhoods, but that no new programs should be started to accomplish this. The council recommends the mayor reduce costs and re-evaluate the size and scope of city government.  And last, they tell the mayor it's okay to raise revenue when and where appropriate.  In this recommendation they suggest raising the rates for commercial parking lots may be okay, but to not unduly burden local businesses with excessive parking fees.

As you might expect, no one is happy. Evaluating the mayor's budget pits one person's idea of an essential priority against another's very different opinion.

McGinn's entry into public office has been criticized. Accused of brash decisions and rookie mistakes, McGinn has been more politically savvy than expected. Notable in his response to the budget crisis McGinn has made decisions that suggest he has done what all politicians do best, demonstrate allegiance to his political base. Ever aware of the membership lists of the Sierra Club and Cascade Bicycle Club, whose support got him elected, McGinn has defended and defined their political agendas at every turn.

The mayor's three overarching priorities are so vague as to be meaningless in making definitive line-by-line cuts. The realities of the mayor's cuts make the agenda of his supporters much clearer. While the mayor has imposed a hiring freeze and eliminated some 200-plus positions in city government he has fired only 214 of the city’s 11,200 workers. But, he has hired parking enforcement personnel to enforce one of his notions that eliminating or reducing parking will get rid of cars.

Meanwhile, small businesses and restaurateurs argue that raising revenue by increasing parking fees will damage their business and further reduce the tax revenue the city depends on.  The mayor was proud that he has reached an agreement with 17 of the cities 24 public service unions to reduce pay.

McGinn's press conference announcement claimed he saved $6 million. His negotiations, however, while real for next year, are nothing more than a raise city workers were expecting to get. There was no "basic pay" reduction in any of the public employee contracts. Yes, several unions agreed to furloughs without pay, but the majority didn't give an inch in their existing pay scales. Seven of the city's unions didn't budge at all. Notable among them are two of the city's most political powerful unions,  the firefighters' union and the police guild. Both escaped without having made any concessions, yet their pay and benefit contracts with the city represent a sizable part of Seattle's expenses. McGinn is no dummy, he knows who holds the power at election times and it isn't the librarians or gardeners for city parks (whose budgets he hammered).

The city council priority list to the mayor suggested they didn't want policing reduced. One can speculate they didn't want the police who patrol the streets, or firemen who enter burning buildings, to be part of cost-cutting. The sad part is that 179 upper level personnel in these two departments make over $100,000 a year each. This doesn't count overtime, health care, or retirement benefits. The high pay jobs give up nothing to help meet the city's budget deficit while the patrolmen or firemen who risk their lives in the line of duty aren’t in that pay bracket.

The council's request that the mayor reduce costs and re-evaluate the size and scope of city government is a laudable request. The mayor, who has the basic responsibility of administering the city may, unfortunately, have very different ideas on how to go about the task. While the city council has a small staff to provide analysis of city operations the advice they give isn't as comprehensive as one might hope, partly because they get the bulk of their information from the city departments asking for money. As a result, the city council members seldom know exactly how much a specific project, decision, or policy costs. Do they know an average stop light costs between $50,000 and $200,000, according to national data surveys? Or, do they know how much a cosmetic median on Greenwood Ave N. actually costs?

Lots of luck to get any reliable data on the exact cost of traffic revisions citywide to support the mayor's bicycle program. Planners at the Seattle Department of Transportation and workers have been busy installing new bike-actuated traffic signals, as well as lane revisions and signage that support his allegiance to the Cascade Bicycle Club.

Is there common sense in the mayor's plan to limit city programs at some community centers? Good question, because he deems them too expensive to operate the way they have been, but he included $20 million in the budget to build a new one.

Whether for nations, states, counties, or cities, budgets are influenced by the unions and guilds of public workers. Nationwide, public-sector unions have grown three times faster than private sector unions. Likewise the number of government workers has grown proportionately faster than population growth. Last summer Gov. Chris Gregoire revealed that the biggest employer in Washington state is government. It doesn't take a rocket scientist to acknowledge that smarter labor contracts must be negotiated.

We could ask if McGinn or the council knew that in the last election cycle, public sector unions, and non-profits, contributed $88 million nationwide to individual candidates and political parties. Enough, certainly, to gain significant influence over policy and decisions. Does the council imagine that locally the Sierra Club, the firefighters, the Cascade Bicycle Club, or the police guild haven't influenced the mayor's budget decisions?

While we can't expect council members or mayors to become experienced negotiators, or understand the complexities of labor law, it's obvious that they need to become better informed and become more involved in labor contract details. Council members are unlikely to know how Seattle labor contract negotiators have interpreted state labor laws (RCW's 41.56.140, 41.56.028, 41.56.030, 41.56.465), which direct negotiators to consider cost of living and similar wage scales in neighboring jurisdictions. How those laws have been interpreted have a major influence on negotiated agreements the city has with its unions. Do city council members know that nearly half of the city employees in charge of negotiating labor contracts for the city were once negotiators for the unions?

What we do know is that council members and the mayor have paid little direct attention to labor agreements. The difficulty is that these agreements along with a major part of the city's departmental operations have established spending priorities that can't be met by existing revenues.

Maybe the reason for the neglect is the ongoing tug-of war between the powers of the city Council and the mayor. Or, maybe it's the classic debate between the mayor as CEO of a city, or the "city manager" system. City manager cities elect a mayor to cut ribbons, kiss babies, and award keys to the city and hire an executive to manage the nitty-gritty of government. Supporters of the strong mayor CEO system might say it's none of the council's business how the details of city management are handled, and the council might perceive that if the mayor can't do the job, they should.

In this budget cycle the council did state it wanted to "reduce costs and reevaluate the size and scope of city government." The ugly reality is the mayor's budget proposal hasn't fundamentally changed how the major city departments prioritize their needs. They haven't made any meaningful cuts in administrative personnel, or any effective revision to change the scope of city government.

Instead, many of the departmental budget responses have sacrificed lower pay scale city workers, who do most of the work, in favor of retaining higher paid employees. Likewise one can easily postulate that many of the current city projects aren’t absolutely essential.  While projects might have been put into the queue during more affluent times they haven’t been canceled or deferred until revenue is stronger. They are still being pursued! Nothing fundamental in the scope of government has changed.

The mayor's budget is balanced primarily by increasing fees to produce revenue.  Apparently the council and mayor have forgotten that Seattle City Light and Seattle Public Utilities were created to deliver power water and sewage services to the public at cost. It is shameful that the mayor and council members would justify their decision to raise revenue by arguing our utility rates are lower than other cities. Neither City Light or SPU were ever intended to become a taxing vehicle to support ever growing city government. Yet, that's exactly what the mayor and council appear to have in mind.

We could say, it is strange that our recession is as much about political philosophy as it is money, but the reality is that the two are so intertwined that the two concepts are inseparable.

In the end, either we care enough about our government’s financial stability to demand political change or we roll over to powerful lobbies who care enough about their agendas to take political action.  Maybe we are all too comfortable to care.  With automatic bill payer services, credit cards, good jobs and, not knowing how much your city is spending, it’s easy to not be aware of our financial dilemma.

On the other hand there are those who are concerned when they learn family-wage jobs in small companies are choosing less expensive places to do business or that their government has a billion dollars in deferred maintenance and is about to spend billions more on new projects.

But let's face it. Seattleites will more likely do nothing until they learn the futures market on coffee bean prices is soaring and their espresso will cost another buck. Maybe then Seattleites will take to the streets.

We demand cake and will get it until we go bankrupt or decide to elect people to do a credible job of belt tightening. Let's face it, budgets aren't about money. They are all about protecting the political agenda of those who invested in the outcome.

This story has been updated to clarify the mayor's proposals on community centers.


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