Local leaders blunder on three big issues

On transit-oriented development, taxes, and tunnels, local leaders are earning the dismal verdict: They made it worse.

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The light-rail tunnel through Beacon Hill. (Sound Transit)

On transit-oriented development, taxes, and tunnels, local leaders are earning the dismal verdict: They made it worse.

Wall Street Journal columnist Peggy Noonan suggests that the one sentence that will sum up Obama’s time in office is: "He made it worse.” I come out on the side of Paul Krugman of the New York Times who argues in his recent column that Obama hasn’t failed, as Noonan suggests, because public debt has grown, but because he hasn't focused on job creation. By choking off spending on stimulus and giving into Republican demands for austerity, Obama is solving the debt problem at the expense of jobs that could have been created by smart spending.

On issues related to cities and sustainability, local leaders are earning their Noonan sentence, too: "They made it worse." There are three signal issues that stand out: transit-oriented development, taxes, and tunnels.

First, transit oriented development (or TOD) might seem like garnish for the sustainability acronym soup. But TOD is really about aggregating growth and transit ridership around transit infrastructure, a critical step in making transit pay off and enabling density to work well for residents and workers.

It has been 15 years since voters in the region decided to invest billions of tax dollars in regional transit, in particular light rail. Building around stations, at least in Seattle, has stalled. In Roosevelt, for example, a group of advocates has actually started organizing a call for more density around the planned Sound Transit station, calling for increases in zoning to create the kind of demand needed for light rail.

The problem in Seattle and elsewhere is that local electeds are failing to provide increases in zoning that will lead to the kinds of concentration of housing and jobs around transit that make the investment in light rail worthwhile. It’s simply wasteful to have regional taxpayers build light rail to vacant lots. And in Bellevue bickering over alignment has already slowed down station building and increased costs.

Second, the leaders in the region, just like leaders at the national level, are confusing a debt crisis with a jobs crisis. The problem our region, and especially Washington state, is having is not with too many taxes, but instead not enough leadership on how to make sustainable investments. Research already done shows why Washington isn’t suffering from over taxation. Just about everybody agrees we are getting it wrong on taxes — overburdening small business and relying too heavily on regressive sales taxes. But the legislature is cutting rather than taxing, thereby creating more pain at a time when the economy is flagging. The right taxes can make a positive difference.

Tax Increment Financing (TIF) sounds complicated but, in concept, it’s simple. What TIF allows a local government to do is borrow money at low interest rates, secured by the "increment" of new taxes in the particular area that will flow from real estate development. With this source of money, the city can improve public infrastructure (drainage, sidewalks, etc.) in a specific area, and then, when new development comes to that area pay back the borrowed money with the increases in tax collections when property values go up.

The problem is that in Washington state the constitution’s uniformity clause prevents true TIF. The uniformity provision was intended to protect taxpayers, but instead it has tied the hand of local and state government. But that provision blocks TIF and other good ideas using property values to leverage growth for jobs, and ultimately recovery. The legislature didn’t move on TIF for fear that it would seem like a tax increase. It isn’t, and the legislature can stop making things worse by passing TIF next year.

And finally, everyone’s favorite topic (when they aren’t going on about street food): the deep bore waterfront tunnel. At a time of broken budgets, economic pain, and a stuck job market, spending the states dollars and credit on this mega-project is making things worse. Some say that this job-rich construction project actually is our salvation. But we’d be better off taking John Maynard Keynes’ advice on job creation: Just bury bottles with $100 bills on the waterfront and then sell permits to dig them up. That would create jobs, but we wouldn’t do it because it isn’t sustainable.

Seattle Port Commissioner Bill Bryant has become the tunnel crowd’s version of Harold Camping (the preacher who foretold the rapture and the end of the world) by predicting that not building the tunnel would be “municipal suicide.” Meanwhile, Bryant still can’t answer basic financial questions about the Port's share of tunnel costs like “where, exactly, will the Port’s share of the tunnel costs come from?”  A way out for Bryant and his friends was to have supported a vote on the tunnel: at least that way, if the tunnel “wins” they can share their folly with the voters.

"Making it worse," in the Noonan phrase, is thus all too easy. Our local leaders are doing just that, even as they furrow their brows about the “tough decisions” they’ve had to make — cutting budgets, dithering over land use decisions, and chasing billion-dollar highway projects as a way to fix our economy and city.

But if you are a leader in this region you have two choices: Make people mad now in hopes that a plan for the future will make all our lives better, or pander to people’s fears in hopes that the economy will rise again, our big problems will go away, and dithering politicians will be forgiven. But future generations will hold all of us voters accountable for the leaders we choose and the long-term effects of their decisions and non-decisions. The verdict that counts comes from them. I hope it will be “they made it better.”


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