Predictions for a jittery 2013
Looking to 2013, Seattle’s animal spirits are pretty high. Amazon is booming, basketball may be headed back (to lift the civic soul), and the Seattle-area economy and lifestyle remain a magnet for talent.
Maybe. I see however a jittery year: defense cuts, a fiscal cliff that remains in play for most of the year, political impasses on big issues in both D.C. and Olympia. My forecast for the year is mostly cloudy. In the categories below I offer multiple predictions, in declining order of plausibility.
Olympia and Gov. Jay Inslee. Most likely 2013 will be a year like the early part of Inslee’s campaign: confusion, staffing weaknesses, a Congressman-like penchant for catchy issues of the day that don’t cost real dollars, such as green economy, grandstanding for transit as opposed to roads, innovation schools to fend off real K-12 reform. A steep-learning-curve governor would leave the major strategy to Speaker Frank Chopp. That translates into spending on the social safety net, health care, and K-12, and putting off funding for transportation and higher ed.
A second scenario is a centrist comeback. The politics of centrist solutions may have done poorly in the 2012 election, but the Rodney Tom-led coalition in the Senate, if it holds together, could change the dynamics. Should the economy flatten, that would empower a business agenda (transportation, lower costs of doing business in the state, education reform), and centrist Democratic challengers to Inslee in 2016 could start to emerge.
The third (and least likely) scenario is one where Inslee decides to become a reformer, not the conventional, constituency-serving Democrat of his past history. This would involve Inslee forming a strange-bedfellows alliance with Sen. Tom, in a pro-growth, low-taxes, improved-business-climate strategy that lines up against Speaker Frank Chopp and the Ed-Murray-led Senate Democrats. Unlikely, but Inslee likes to defy expectations.
Seattle mayor’s race. The most likely outcome is a repeat of 2009, when the battered incumbent mayor is squeezed out by two non-city-hall candidates with a base of supporters and good campaign presence — Peter Steinbrueck (social services and neighborhoods) and Ed Murray (gays and unions). I'd expect Steinbrueck, with his broader, citywide base, to win the general.
Second most likely is that Councilmember Tim Burgess consolidates his support among City Hall insiders, business, and moderates, brooming up dollars and name supporters early enough to emerge as the front runner. His harder challenge, as a moderate, is to win the general election against a Great Liberal Hope. His main pitch: time to have somebody who can run City Hall professionally and prudently.
Third possibility is that McGinn does well in a crowded primary, picks up momentum, and positions himself as an incumbent who has learned the job, rewarded his constituencies, and has a now-pleasing mixture of maverick courage (as with the Sonics arena) and genial openness. He could be the "just-right" candidate, defining Murray as too volatile, Burgess as too conservative, and Steinbrueck as too old Seattle. However, McGinn's key constituencies of young people and minorities may have lost their ardor, since his 2009 race drew on the energies of the great Obama movement of 2008.
City and County. The City Council races won’t be very exciting, overshadowed by the mayor’s contest and with stronger challengers biding their time in hopes of by-district election in 2015. All incumbents (Sally Bagshaw, Mike O’Brien, Nick Licata, and Richard Conlin) are re-elected, as is City Attorney Pete Holmes. Two hot issues, police reform and the Sonics proposal, are put on hold during a year of Department of Justice oversight and the environmental impact statement on the SoDo Arena. Same with the Waterfront Park, holding its breath that the Big Bore works for the tunnel, and waiting for a mayor who really wants to design a great park (McGinn is tepid about the proposal, suspecting it's an elitist project). The city budget, riding the real estate excise tax bubble and the Amazon economy, maintains its lots-for-everybody philosophy.
The usual yawns at King County: Dow Constantine and all County Council incumbents who run (one won’t) are re-elected with token opposition and minimal debate. Dow’s second term will be a modest let-down, in part because some of his A-team defects to Olympia and a new Seattle mayor. The big county issue will be trying to get more funding for Metro, reigniting the Metro-Sound Transit wars in Olympia.
University of Washington. Most likely is the emergence of a new-model, tech-centric university, with new rules making commercialization of research more attractive for investors, with plans for a new technology-rich district on the emerging campus west of University Way, and what few new dollars coming from the state tied to STEM education and jobs.
A second scenario is adapting to the new normal of paltry state funding, as the McCleary court decision requiring new funding for K-12 siphons off any new dollars for higher ed. There would be some concealed subsidies, such as a state program to buy down interest rates on student loans or other devices for helping those pinched by the high tuitions. Maybe some differential tuition steps (charging more for majors that cost more, due to labs, and whose graduates ultimately earn more) get started. But the main "cure" will be a massive new fundraising campaign.
The third, rather remote possibility is that President Michael Young announces his departure, concluding that the magnitude of effort in restoring funding for such a constrained and ambitious university is just too big a lift. That would produce a period of more-serious soul searching for a new financial model for the U.W.
Seattle Schools and K-12 education. The 2013 School Board election could be a crossroads event. School reformers, led by business and new-economy types, were surprised and disheartened when they lost the majority in the 2011 election. They will try to bump off Kay Smith-Blum, the leader of the group that felt dissed by the reformers and the Goodloe-Johnson administration, as well as Smith-Blum’s loyal lieutenant, Betty Patu. A reform-majority board, along with an education-oriented mayor like Burgess, could revive the reform agenda, currently rather dispirited.
The second scenario is that the Smith-Blum 4-3 majority prevails. I’d then look to the reformers to push for a change in the way we elect (or appoint) school board members.
A third scenario is that one of the two levies fails in February, as voters balk at the high combined price, $695 million for the capital improvements levy and $553 million for the three-year operations levy, and express their distrust of the Board, past turmoil, and the low-key Supt. Jose Banda. This could really put Seattle Schools in crisis mode. Related to this will be the battle in Olympia over having the state equalize levies, taking money from rich districts (Seattle being one) to help those with lower tax bases.
Looming over all school systems is the state Supreme Court’s McCleary case ruling that the state must significantly and gradually increase its funding of schools, starting with about $1 billion of new funding in the new biennium. Gov. Chris Gregoire floated a ploy where new gas taxes at the wholesale level fund school buses. The Republican-led coalition in the Senate will insist on funding McCleary and then finding corresponding cuts in social services, without new taxes. The House Democrats will want to pass the funding question to the voters, thus preserving existing programs. This is a recipe for a long session of playing chicken, paralleling the Congressional standoff over raising taxes and cutting entitlements. Inslee has boxed himself in by saying he wouldn't levy new taxes, but he'll probably find a way to squirm free of that pledge.
The economy. I don’t see Congress resolving its high-stakes showdown over taxes and the deficit anytime soon, aside from some Band-aids, so the national economy and business confidence will remain in low gear. Two local factors will shake the confidence in our tech-driven economy. One is cutbacks in defense spending, which affects Boeing and the whole south-Sound economy. Add to that the Ports of Seattle and Tacoma, already forced into making big concessions to shipping companies who are suffering from the decline in the world economy. The Port of Seattle will have four of its five commissioner seats on the ballot in 2013, and the current CEO, Tay Yoshitani, whose contract ends in 2014, is likely to announce his retirement. A new commission and the need for defining the new CEO will put the Port and its key part of our economy in the public arena for debate. Most Port-friendly mayoral candidates: Burgess, Steinbrueck, and Murray.
Given the shaky economy and the newness and weakness of the key positions of Seattle mayor and governor, I expect that a moderately progressive business agenda will increasingly call the shots. On that agenda: passing a statewide measure to fund roads and major stalled projects such as the 520 floating bridge; dialing back the high costs of doing business in the state; enhancing tourism with such things as the new Arena, commercializing Seattle Center, and the Waterfront Park; and continuing to develop, partly with transit, the “soft urbanism” of non-Seattle places of doing business that offer some of the attractions of hip, urban, walkable places but without the maddening and costly Seattle political climate.
A few other predictions. This will be the year when Seattle realizes that it can’t fund its rich menu of arts organizations and looks for new public funding. Boeing, unhappy with SPEEA, will initiate more out-migration of its Puget Sound business. A local media company will be sold. Vulcan gets its rezone in South Lake Union, but the build-out slows because rents are too high and traffic is too awful. And the Mariners remain, well, the Mariners.