Defying Durkan, council directs extra soda tax money to low-income programs

The new legislation requires that the revenue be spent on designated programs that serve the communities in Seattle most impacted by the tax. 

Councilmember Mike O'Brien speaks to media and community members about the sweetened beverage tax during a press conference at City Hall in Seattle, July 22, 2019. (Photo by Matt M. McKnight/Crosscut)

The Seattle City Council pushed past threats of a mayoral veto Monday, approving legislation that would guarantee millions of dollars for programs that target low-income Seattleites. By a 7-1 vote, the council passed legislation that would require extra revenues from the city’s tax on sugar-sweetened beverages be used to increase funding for healthy-food and education assistance programs in communities hit hardest by the tax.

The council’s move comes well after the approval of Mayor Jenny Durkan’s 2019-20 budget, which proposed appropriating about $6 million from the Sweetened Beverage Tax (SBT) for programs previously funded through the city’s general fund, opening up general fund dollars to balance the budget. The budget passed the council 8-1 in November.

The money comes from a disparity between the initial estimates for 2018 soda tax revenues, which were just over $14.8 million and a revised total, which came in at more than $22.2 million. In a press conference before the council meeting Monday, Councilmember Mike O’Brien called the original projection “very conservative” and said that the city was expected to exceed it.

When the soda tax was passed in 2017, it was structured to address what O’Brien called a “public health crisis” while also partially negating the regressive nature of the tax by funding programs that would benefit low-income people and communities of color most impacted by the tax, and include job retraining, food banks and meal programs.

O’Brien said the council’s intent for any excess soda tax revenues was for them to be invested in the expansion of those programs or the creation of new ones that would serve the same communities. He said it was never the intention of the council to maintain the same level of spending dictated by the early estimate, allowing excess revenue to be allocated elsewhere.

“If that was all we did through a tax and simply left those communities to continue to consume pop, [instead] of moving forward, that would fail,” O’Brien, who spearheaded the measure, said in a press conference. “Instead we need to reinvest that dollar raised right back into those communities to provide access to healthy alternatives.”

The programs Durkan funded with the additional $6 million are largely focused on health and, according to the mayor's office, serve low-income communities. But the money was not used to expand upon programs designated to receive SBT money or create new programs.

Durkan claims that the programs that received part of the $6 million — which include a food voucher program and school subsidies for fresh fruits and vegetables — would need to be cut if the council’s legislation were enacted. Supporters of the measure have strongly pushed back on this claim. 

A council memo, summarizing the potential impacts of the new legislation, states: “Programs where SBT revenues were used to supplant General Fund resources could be reduced or eliminated as a result of this legislation, barring other budget cuts or creation of new revenue sources to backfill the removal of SBT funds.”

The mayor strongly condemned the legislation in a press release last week.

“I am disappointed that City Council is preparing to cut millions of funding for services that support our most vulnerable neighbors. Despite Council previously approving this plan by an 8-1 vote, this irresponsible step would put families in jeopardy by cutting childcare vouchers and food banks. It would undo years of work from community-based organizations to ensure all our neighbors have health care, nutritious food choices and child care,” Durkan said in the press release.

The mayor reiterated this in a statement shortly after the vote Monday in which she said she would veto the legislation: “Because Council has refused to fund these vital programs or put forward a balanced plan.”

“I will not turn my back on the Seattle residents who count on these programs,” the mayor said in the statement. “Our City’s budget is required to be balanced, and no CEO, small business owner, or president of a nonprofit can commit to funding new programs without knowing how they pay for it. The Council wants to run up charges, and have someone else pay the bill. Unfortunately, it lands directly on those most in need.”

The council passed the legislation Monday with a veto-proof majority. Councilmember Debora Juarez was absent and Councilmember Abel Pacheco voted against the proposal after taking a moment to think about his decision.

Pacheco introduced an amendment that would have deferred action on the issue to 2021 because he thought passing the legislation would “tie our hands” for this year’s budget.

O’Brien responded by saying that in passing Monday's legislation, the council is “intentionally tying our hands” by adhering to the original intent of the 2017 legislation. Only Pacheco and Councilmember Sally Bagshaw, who ultimately approved of the overall bill, voted in favor of this amendment.

This standoff was set last year as the council debated the mayor’s 2019-2020 budget. O’Brien laid out the proposal passed Monday to prevent the soda tax, which went into effect Jan. 1, 2018, from being used to pay for general fund needs starting in 2020. That legislation creates a dedicated soda tax fund and requires that all revenues from it — both expected and unexpected — be used to supplement designated programs or develop new ones.

The soda tax vote comes amid increasing tension between the council and the mayor. Last week a trio of council members called on Durkan to reopen negotiations over a police contract after a judge found that the city is partially out of compliance with required federal reforms.

Jason Johnson, acting director of the Human Services Department, warned in a letter to the administrators of programs funded by the $6 million last year that their funding could be cut.

“Your contract is in jeopardy because of a recent Seattle Council legislative action,” Johnson wrote in bold in the letter, asking the providers to develop a funding contingency plan.

The letter’s contents were first reported by journalist Erica C. Barnett.

Tanika Thompson, food access organizer at Got Green, an organization that advocates for environmental, racial and economic justice, pushed back on these “scare tactics,” which she claims are being used by the mayor’s office to avoid duties.

“It is entirely in the mayor’s power and, in fact, it’s her responsibility to find an appropriate, more stable funding source for the programs where the sugary beverage tax revenues were used to supplant general fund dollars,” Thompson said at the press conference.

In their own letter to Durkan, Councilmembers O’Brien, Lorena González, Teresa Mosqueda and Lisa Herbold called Johnson’s rhetoric “alarmist and inaccurate.”

City Budget Director Ben Noble, in a letter to Council President Bruce Harrell in late June, called this legislation and a similar measure that passed Monday to enact financial guidelines for short-term rental tax revenues “half measures” that would “redirect funding without answering the question of what must be cut to make this redirection possible.”

Correction: An earlier version of this story misstated the nature of the programs funded by the $6 million allocation. The story has been corrected. 

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