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.

The Good Life Could Always Be Better

We've all heard the mantra by now. Seattle is becoming a city of rich and poor. We need to prioritize workforce housing so that cops, firemen, and teachers don't have to take three buses to fight a fire, arrest a child pornographer, or earn their pittance slaving in the vineyards of Seattle's second rate educational system.

As we move toward renewal of Seattle's housing levy in 2009, we'll be hearing more of this. A new group called the Middle Income Housing Alliance, chaired by former Mayor Charles Royer, has formed in response to our plight.

I say "our" because this is me that they're talking about. My income puts me pretty much squarely at Seattle median. Homeownership within Seattle wouldn't work for me. My family bought in Shoreline, where lower home prices and better schools proved an irresistible draw.

But buy we did, and as a result, I receive my fair share of the four dollars in tax breaks that flow to middle-class homeowners for every federal housing dollar that goes to the poor.

Woo-hoo!

But some are feeling like that's not enough.

A Seattle Times Op-Ed by Royer last November makes the case. Only San Fransisco has fewer children per capita than Seattle, and fewer than forty percent of our fire fighters now live in the City. This, argues Royer, is a question of "values," and we need to resist the unhelpful rhetoric of class war to put more resources behind the relatively privileged.

We have not really had a conversation in Seattle about how this new middle-income housing crisis is affecting our core values. That is, how are our kids growing up and our families coping? What does the continuing loss of the middle class mean not only for those families, but also for us, as a community, both in terms of our economic health and our social fabric? Does it matter if kids growing up in Seattle never live next door to a firefighter, or a police officer, or a teacher? What is a good neighborhood without the presence and the participation of the people who work hard for the city, yet cannot afford to live here with their children? ...

I think the conversation about our core values needs to start now. And it needs to start with housing our middle-income work force.

It needs to be a civil conversation. It needs to resist the harsh political tactics that pit the haves against the have-nots. We've already seen some of that. And, it is neither honest nor helpful.

Wow. Imagine growing up and never having the opportunity to live next door to a firefighter, teacher, or cop, subjected instead to an unwholesome mix of Merrill-Lynch executives and crack whores.

Is he serious?

Have you ever noticed how when the "have-nots" push back, that's a "harsh tactic," but when the haves exert their substantial power, we simply call that "the market?"

Among their recommendations is to greatly expand the Multi-Family Tax Exemption. This program, which gives developers tax breaks (a projected $10 million thus far) to include housing affordable to those at up to 80% of Seattle median income in their construction, has been criticized as a "give-away" that creates housing that is more expensive than that delivered by the market itself.

While the MFTE is widely viewed as a not terribly effective program, the solution, apparently, is to make the giveaway even more developer friendly by raising the required affordability to 120% of median, which would mean a single person pulling down around $65K annually. The Office of Housing just released a new report to the City Council that makes the Middle Income Housing Alliance's case. Support for their agenda is also a priority of the Greater Seattle Chamber of Commerce.

Strangely, the King County 2006 Housing Benchmarks report doesn't really support this dire picture of a disappearing middle class. The most severely challenged income group, believe it or not, are those earning 40% or less of median, where 99,200 households compete for just 31,40 rental units. Those earning 80% of median or more have far more options.

Close to 40% of King County’s rental households - more than 100,000 renters - earn above 80% of median household income. ... Almost 84,000 of these households occupy rental units that would be affordable to lower income levels, which decreases the supply of housing that is actually available to the lower income households.

So, not only is there sufficient housing stock to meet the needs of the middle-class, bargain hunters that we are, we spend a lower proportion of our income for housing than most by poaching on that which, in a more just world, might be reserved for the poor.

I guess that tax giveaways to developers to spur more housing for the moderately well-off would, in theory, free up cheap rental stock for those further down the housing food chain, but that seems a rather indirect approach. Why not solve hunger by subsidizing PCC shoppers to not hog all the specials at Safeway?

I hate to harsh Royer's buzz, but in these times of growing inequality, there's something obscene about giving tax breaks to wealthy developers so they'll produce housing that's more expensive than what the market already produces. Why not invest those dollars we give away to developers directly into the schools? Then maybe those of us who have options will have a reason to stay.