Going Down With No Backbone

The thing we've been waiting for is happening. As Seattle City Council prepares for the delivery of Mayor Nickels' big fat gift to for-profit housing developers in the form of an expansion of the Multi-Family Tax Exemption, the economy is contracting, and with it, the capacity to deliver the services that are most needed when budgets go south. This morning's Seattle Post-Intelligencer reports a projected $70 million shortfall on the King County side.

County Executive Ron Sims has asked department directors to prepare 2009 budget proposals that would cut spending by 8.6 percent from a sustaining level of services to close that gap.

In response, several elected officials from the county's criminal justice agencies -- Prosecutor Dan Satterberg, Sheriff Sue Rahr and judges of the district and superior courts -- called a joint news conference June 5 to sound the theme of "Public Safety in Peril," making alarming predictions about the effects of the proposed cuts. The criminal justice agencies' budgets, which account for 70 percent of the $650 million general services total this year, are presented by Sims to the County Council for approval -- but Satterberg, a Republican, and Rahr and the judges, who run as nonpartisan candidates, are independently elected and operate from their own power bases apart from Sims, a Seattle Democrat who is the county's highest-ranking elected official.

The article goes on to describe how the budget process will, despite denials on both sides, become politicized by the upcoming race for the King County Executive position. The Public Safety in Peril frame offers a taste of what is to come. As the criminal justice system eats the county budget alive, a new downtown jail is proposed at a cost of $110 million for construction and $19 million annually to operate. It doesn't take a Norm Stamper to see that this is the wrong direction, and we can count on the politics of fear to drive at least one side of this debate.

Meanwhile, the State picture is looking equally grim. The Washington State Center on Budget and Policy Priorities notes that, in the face of a projected $2 billion deficit, the legislature needs to look more realistically to the revenue side of the picture to sustain current levels of services. Even these, as anyone who understands how broken things are will sadly confirm, are nowhere near adequate to the need.

The continuing projection of a significant deficit is a matter of public concern and a deliberate conversation about how to close the gap should begin in earnest. It is important to note, the problem is not one of spending; current budget figures are largely in line with past budgets as a share of the economy (see figure above). Instead, changes to our revenue structure must be part of the discussion.

Earth to Olympia: Grow some fucking balls and start taxing the rich. Race to the bottom corporate welfare and weak-kneed anti-taxation policies that favor the most affluent are an unsustainable politics.

Washington State is far from alone in this. The Center on Budget and Policy Priorities reports that 29 states face a total shortfall of at least $48 billion for 2009. As Washington State isn't even on their list, this projection surely underestimates the scope of the crisis. While there's an excellent discussion of the complexities of various alternatives at their website, I'll put it in layman's terms: We're screwed, and we're going down, big time.

Looking at the Seattle picture, I'm reminded of a line from Joan Baez' anthem to an asshole:

You who are so good with words
And at keeping things vague

Meaning this: Seattle, like everywhere else, is heading toward ugly recession, but recent Office of Finance analyses project mostly blue skies. The June Economic Update admits only to this:

Sales, B&O, and REET taxes are particularly sensitive to recessions (see table) as they are good representations of economic activity. Inflation adjusted sales tax receipts declined on average 6.5% in the first year of the last four recessions. B&O receipts suffered similar fates. If we are in recession the NBER likely won’t identify it until late summer. By then Seattle’s tax receipts should provide some guidance as to where we are and where we’re going.

Meanwhile, if anyone's driving, they're not saying. Compared to last April's economic report to the City Council, which projects a mere 30% probability of recession, this most tentative of admissions to bad news comes 0ff as downright alarmist. But even this, if one scrolls all the way to the last line, foretells budget cuts to come.

So, why are we giving tax breaks away to rich developers so they can create housing at prices that exceed what the market already delivers without the aid of public subsidy? Getting re-elected takes money I guess. Especially when one lacks a backbone.