Selling Seattle to save its finances

We could be hit by a "perfect storm" of tax cuts and revenue limits. What's a city to do, then, to fund its needs? The private sector might have to be part of any solution.

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Mayor Mike McGinn

We could be hit by a "perfect storm" of tax cuts and revenue limits. What's a city to do, then, to fund its needs? The private sector might have to be part of any solution.

Mark Funk, who represents the No on I-1098 effort, was in the Crosscut offices last week and thanked me for helping him out.

I'm actually in favor of I-1098, but he said an article I had written about exploring extending an income-style tax to Seattle is helping him make the slippery-slope argument the opponents of the tax reform initiative are using. 

My suggestion was that if I-1098 passed, Seattle could, and I think should, request authority from the state to impose its own progressive tax on high wage earners in order to make city tax system also less regressive. Boosting sales taxes and the B&O tax are some of the few levers the city has to deal with revenues. But the Seattle idea is being used by the ballot measure's opponents to sell their argument that I-1098 will inevitably lead to more taxes on everyone.

Not my idea, actually. My point is that Seattle ought to be able to work out of its own sense of social justice and economic necessity. Many cities have income or employment taxes as part of the mix. I-1098 gives some relief on state property and B&O taxes, but municipalities (and counties) ought also to have a wider range of tools to raise revenues and implement more progressive taxation. This includes lowering other taxes and fees in the cause of fairness.

Seattle, in fact, is facing a potential "perfect storm" of fiscal fiasco. If Tim Eyman's I-1053 passes and limits the legislature's ability to raise taxes, if the liquor privatization initiatives pass and reduce the state revenues and profits that are shared with counties and cities, if the taxes on candy, pop and bottled water are repealed, the city will be hit with significant revenue additional losses, and the state hampered in its ability to replace those lost revenues. This is very likely a winning combination in November.

And if I-1098 fails, there won't be any relief on the state B&O or property taxes, let alone a path to a more progressive system. On top of that, if the GOP gains control of either or both houses in Olympia (a possibility depending on the size and scope of a Republican tide), expect more cuts, reduced revenues, and continued reliance on a regressive tax system where the current slippery slope has allowed the biggest and most successful industries and businesses (Boeing, Microsoft) to get exemptions, loopholes, or legalized tax dodges while the little guy gets squeezed by a system accounted to be the most regressive state tax burden in the nation.

Friends of mine who have moved to Washington from elsewhere love the idea that there's no income tax, but once they're here awhile, they complain that they get nickeled and dimed to death on things like license fees. The city budget crisis is causing Mayor Mike McGinn to propose up to $4 per hour rates for downtown parking meters, for example. But given the kinds of cuts that have to be made, and the limitations on raising revenues, the choices are limited.

I recently asked McGinn about whether the city would have to be more aggressive in exploring other ways to generate revenues (aside from the laudable plan to go after people who, collectively, owe some $25 million in unpaid parking fines). What about public-private partnerships? Or instead of hitting non-profits like the Museum of History and Industry for loans, what about other investigating other revenue opportunities?

Can money be raised, for example, through more or new park concessions, advertising or naming opportunities? McGinn believes the city should look into all of those, and said that selling the naming rights to the new skateboard park at Seattle Center was underway. 

Looking for ways to rent out facilities at places like Magnuson Park is another opportunity. So is finding more private uses for public spaces. He cited the possibility of a Tavern-on-the-Green-type concept for Seattle parks, or even considering privately run parks, like New York's Bryant Park, which features restaurants, fashion shows, free events, and even seasonal shopping. Bryant Park has become what many consider the best park in Manhattan. While we're subsidizing the MOHAI in its move to South Lake Union, McGinn said the city also needs to find organizations "willing to pay us some money" to use city property. This, he noted, this had to be something the city should consider carefully. "I would encourage that we explore these things."

At root, McGinn is unapologetic that cities are largely about money, and that Seattle shouldn't be ashamed of that, and he criticized Seattle's knee-jerk reaction against anything that smacks of commercialization. Those costly, experimental downtown toilets? Other cities paid for them with advertising revenues, why not us? McGinn said he was not upset about a small number of high rises downtown being able to put up signs and corporate logos. "I am not offended that it says commerce happens here."

He likes the salmon bakes that restaurateur Tom Douglas initiated at Victor Steinbrueck Park this year, and he wonders why we can't have advertising on bus shelters and benches like they do in other cities. Are we really maintaining some kind of purity by having ad-free shelters when the buses themselves are frequently wrapped so as to become rolling, 3D advertising bundles?

While these attitudes pre-date the fiscal crisis, the city's need to reconsider its rules and sensibilities going ahead is something of a necessity given that revenue options might be limited, the tolerance for new and higher taxes is lower, and the need to fund basic programs grows acute.


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About the Authors & Contributors

Knute Berger

Knute Berger

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