Occupy needs a lesson on financing the public good

Conflicting demands suggest that parts of the movement don't understand the taxing system or what gives the city of Seattle and the state the money to provide services. Or, maybe just want everything their way.

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Protests in Olympia from the Occupy movement.

Conflicting demands suggest that parts of the movement don't understand the taxing system or what gives the city of Seattle and the state the money to provide services. Or, maybe just want everything their way.

I was downtown on Black Friday and walked by Westlake Park. The Occupy Seattle protestors were coexisting with the carousel and the holiday shoppers. The signage suggested, “Buy Nothing.” Other signs said, “Buy Stuff.” The protestors wanted people to not waste money on unnecessary purchases and not reinforce corporate and personal greed. The following Monday, The Seattle Times reported, they were on their way to Olympia to protest state budget cuts.

The Occupy Seattle protests are an exercise in free speech, but they have consequences.  Occupy Seattle needs a tutorial on the Seattle and Washington state budget revenue base.  Their protests downtown can have a number of impacts on the Seattle city budget.  And their lobbying of state government, protesting some budget cuts, doesn’t consider certain realities.

The first reality is that by law, city and state budgets must be balanced. If expenses go up, additional revenues are needed or service cuts are made. Secondly, if shoppers believe downtown Seattle will be disrupted, they can drive elsewhere to make their purchases. And our retail core is already disadvantaged by high parking fees compared to Bellevue Square and other malls. Thirdly, the number of police assigned to cover the protest means that neighborhoods are not patrolled, or overtime is being paid, or a combination of the two. Overtime is expensive.

The city general fund revenue is primarily from sales, property, and business and occupation taxes. The major source of funds is the downtown property tax and the retail core. As the success of local business feeds the city budget, anyone who cares about city services needs to be supportive of a successful downtown.

The city budget has changed over the past 50 years and a new mix of services requires different service reductions. The "Great Society" of the 1960s created the Model City Program. This federal program gave the city money for social programs that were a new mission. The problem is that  these programs were cut or eliminated over the years, but the undertaking put the city in a new business. The city did not deliver all the services but provided them through a network of nonprofits.

The local organizations became excellent lobbyists, Frank Chopp (now the Speaker of the state House) and the Fremont Public Association being one example.  When the federal programs as well as federal money to the states declined in various areas, the city was lobbied to continue the service. Some would call this mission creep. There was not a similar revenue creep.

What would you cut? In 1960 before Model Cities, Seattle had a simple set of services reflecting the constrained funding base. Identifying cuts would have been easy. The general fund was almost $40 million of which $13 million went to police and fire. Parks received $2.6 million, libraries $1.6 million, engineering and building $10.7 million, health $1.4 million, and “other” $2.2 million. The mayor’s annual salary was $15,000 and city council members made $7,200. The elected officials were part time. The focus of the cuts would be simple to select.

Seattle’s 2012 budget is around $910 million. Public Safety, which includes the courts and public defense, is now 57 percent of that total. The other major categories include 3 percent for Neighborhoods and Development, 6 percent for Health and Human Services, and 16 percent for parks, arts, and library. At $54 million, Health and Human Services today comprises more than the entire 1960 budget.

These changes reflect the times and the changing nature of services desired Seattle residents as well as a sophisticated lobby effort by the service providers. But when the city cuts the budget, human services spending will be impacted.

The revenue of the current budget includes $158 million in sales tax and $176 million in business & occupation tax or about 37 percent of the budget. When consumers spend in Seattle, the city receives sales tax revenue that can be used for services. If shoppers go to suburban malls instead, another city gains.

The state budget also depends on the sales taxes and business taxes. The budget is being cut because revenues are down. Consumer spending is down, so revenue from both business tax and sales tax is down. Since the state is constitutionally required to fund K-12 education, cuts in other areas — including social services, higher education, and the environment — are required.

The goals of the various Occupy movements include bringing attention to crony capitalism, lack of jobs, growing inequality, rampant consumerism, and corporate and personal greed. A successful protest has a few clear goals and works to achieve them.

My confusion about the goals of this protest increased when I read that unions were supplying buses to transport people to Olympia to protest the state budget cuts. As mentioned, some protesters also encourage people to buy nothing; the budget cuts are necessary partly because of declining sales tax income, and will lead to layoffs of unionized state employees. Personally, I like having it both ways with no consequences from my actions. Don’t buy stuff and don’t cut the budget.

If we are concerned about jobs, we need to lobby for a state economic and competitive strategy and against cuts to colleges and universities, the Life Science Discovery Fund, and what the state does to have a successful economy. If we want stability, we need to lobby for a balanced state tax structure. We need to look at international competition and realize that our standard of living is declining and we need to have a new game plan.

Some of the protestors said to buy from local stores. While I strongly support trade, I agree with the protesters on this: buying “local stuff” helps the local economy, employs your neighbor, and ultimately helps the city provide local services. It’s not just the size of the retailer, it’s the product you buy and where the value is added.

Make your statement with Almond Roca or a bottle of Washington state wine. For local crafts, visit the Bellevue Craft Museum or booths at the Pike Place Market, such as the Crystal Bouquet from Arlington. Take an outing to the museum district of Tacoma and buy from a local glass artist. Give a restaurant gift certificate or a Starbucks gift card, season tickets to a local music or theater group or a membership in MOHAI, the Burke Museum, the Children’s Museum, or the Pacific Science Center. Give a weekend trip to Leavenworth or Sequim. And if you happen to be a “crony capitalist,” give your friends green fees on a local golf course.


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