Month: November 2018

Seattle City Budget: The Changes That Made the Cut

Last Wednesday, November 7th, the chair of the budget committee, Councilmember Sally Bagshaw, released her budget package. As chair, it was her responsibility to take all of the changes proposed by other councilmembers, select what to include and what to ignore, and come up with a budget that would balance. For every proposal to spend additional money, something else in the mayor’s proposed budget had to be cut.

But first, a good budget writer looks for adjustments to revenue (increases in tax collections, fees, transfers from other funding sources, etc.).

Bagshaw made a few adjustments to find extra revenue in her budget. First, she added about $1.5 million for 2019 and $1.4 for 2020 to reflect the latest October 2018 revenue forecast. Tax collections are up, and it makes sense to adjust next year’s budget for that increase.

Bagshaw also proposed ending the 20% of revenue from the red light camera fund that goes into the School Safety Traffic and Pedestrian Improvement Fund. She would divert that money to the General Fund to create another $1.8 million in 2019 and $871,000 in 2020.

Bagshaw also would to ask all city departments to take a general cut (they can decide what to cut) to free up $900,000 in 2019 and $1.4 million in 2020 for the General Fund.

Specific departments were targeted for larger cuts, too. The biggest was a cut of $1,365,000 in 2019 and $1,000,000 in 2020 from the Seattle Police Department (SPD) for salary savings. SPD has had trouble filling current vacant positions (which makes Mayor Durkan’s request for money to fund 40 new positions in SPD absurd). Councilmember Lorena Gonzalez, who chairs the public safety committee, proposed that the SPD submit quarterly reports to the council on staffing levels, and Bagshaw included that request in the budget. The council also is asking the mayor to submit a report regarding how the city collects fees for special events; Councilmember Teresa Mosqueda is concerned that the city isn’t charging businesses enough money to cover salaries for police security at those events.

Other department level cuts include a $614,000 cut from the Office of Economic Development, $335,000 from the Department of Finance and Administrative Services, and cuts to executive and managerial positions from several departments.

Bagshaw’s total revenue adjustments and cuts come to about $7.7 million in 2019 and $6.2 million in 2020, for a total of about $14 million that the council can use for other priorities.

It’s worth noting that more money could be freed up from the police department’s budget by looking closely at the $7 million set aside for salary increases in 2019. The city council will vote tomorrow on whether to approve the new contract for rank-and-file police officers (the source of that $7 million in salary increases). If the council rejects the contract, then there will be a lot more money available for changes to the budget come Wednesday morning, when the council begins its vote on the budget amendments.

Also, the city council needs to look more closely at the Seattle Streetcar system for potential cuts. The transportation budget includes a number of requests from the city council for information on the streetcar system. Eventually the council will need to discuss cutting back or shutting down a system that provides little benefit to Seattle commuters at a price of over $11 million per year in operating costs.

In the meantime, here’s a look at the spending items that Bagshaw included in her budget package.

Of the $14 million available, the Human Services Department and homelessness programs are getting about $8.3 million of that. Increased funding for homelessness services include:

  1. $1.1 million to fund SHARE/WHEEL emergency shelters, which the mayor’s budget only funds through June of next year. This will save 217 shelter beds from closing.
  2. $575,000 to add back homeless prevention services that the mayor cut from the budget.
  3. $280,000 for a health and environmental investigator
  4. And $200,000 for day center operations.

Other services within the Human Services Department that will see a funding increase include:

  1. $1.2 million to expand the Law Enforcement Assisted Diversion program (LEAD), which directs low-level offenders (primarily drug users and sex workers) into community-based services instead of jail
  2. $1 million for drug treatment programs
  3. About $1 million for contracted wage increases for human services staff
  4. $969,500 for food banks and food programs that the mayor wanted to shift over to be funded with taxes collected from the Sweetened Beverage Tax (these will be shifted back to the General Fund)
  5. $100,000 for a Community Health Engagement Location, also known as a supervised consumption site
  6. And $88,000 to add a mental health professional to The Navigation Team (finally).

Some of items inside other departments that made the cut include:

  1. $1 million for community-based organizations to treat juvenile offenders and keep them out of juvenile detention
  2. $440,000 for civil attorneys to defend indigent folks in Seattle Municipal Court
  3. $400,000 for the Home and Hope Program, which is working with private developers and nonprofits to build affordable housing combined with early childhood learning centers
  4. $395,000 for legal defense services in the Office of Immigrant and Refugee Affairs
  5. $263,000 in additional funding for tenant outreach and legal services
  6. And $170,000 for a Legacy Business Designation Program, which would provide a means to preserve small, iconic businesses in our rapidly gentrifying city.

Some big-ticket items didn’t make it into Bagshaw’s budget, including Councilmember Teresa Mosqueda’s proposal for a $3 million mass tent shelter, similar to the ones in Tacoma and Los Angeles. Also, Councilmember Mike O’Brien’s proposal to set aside $300,000 that community-based organizations can use to create new emergency housing didn’t make the cut.

There’s not much additional money in this budget for affordable housing. Mayor Durkan’s original budget proposal included a 3% increase for housing programs, but the rate of inflation in Seattle is running at 3.1% for the past year alone. So a 3% increase for a 2-year budget cycle is just not sufficient. Without additional revenue—preferably from a new source (like the Employee Hours Tax, an income tax, or capital gains tax)—Seattle won’t be able to meet the need for affordable housing over the next 10 years.

 

City Councilmembers’ Changes to the City Budget

In late September, Seattle Mayor Jenny Durkan released her 2019/2020 budget proposal. Her priorities are heavily weighted towards expanding law enforcement—not a surprise, given her prior job as U.S. Attorney for the Western District of Washington State.

In October, the Seattle City Council worked on amendments to Durkan’s budget, to make it reflect more of the council’s priorities. Unlike the mayor, who is serving her first term and who views the budget as a way to remake the city according to her own vision, the council has longer term goals in mind: supporting programs that the council established in prior years, addressing long-term issues like homelessness and racial equity, and making sure that city departments operate in a transparent way.

Here’s a look at just a few of the amendments that city councilmembers proposed in October, focusing on issues of homelessness, tenant’s rights, housing affordability and displacement, racial equity, and the disposition of two new taxes that the council put in place in 2017.

Homelessness

Mayor Durkan’s budget contains a couple of big surprises regarding homelessness spending. In a time of rising numbers of homeless people on the streets of Seattle, Durkan had decided to cut funding drastically for basic emergency shelters, while increasing support for The Navigation Team by 38%. The Navigation Team is Durkan’s pet project for clearing encampments of homeless people—only a handful of whom are referred to shelters, while the rest are displaced and their belongings seized or thrown in the trash.

Earlier this summer, the Seattle City Auditor released a report on The Navigation Team, which found that the team fell far short of transparency. (That report can be found here: https://www.seattle.gov/cityauditor.)
The team’s operations were unclear, its guiding philosophy was undefined, its members were untrained in how to deal with mental health issues and racial equity problems, and it didn’t even collect meaningful statistics on how many people were referred to shelter versus how many were simply shoved down the street.

So Councilmember Lisa Herbold has proposed an amendment to the budget that would, at the end of each quarter, require The Navigation Team to list how it’s meeting transparency goals, as outlined in the City Auditor’s report, before the City Council votes to release money to fund the next quarter’s operations. Herbold, it turns out, has authored quite a few provisos (or holds on funding), through which the council can exercise its main tool for ensuring that city departments follow the council’s priorities.

Councilmember Kshama Sawant sought to address the other surprise in Durkan’s budget. Sawant proposed adding back money to fund the SHARE/WHEEL emergency basic shelters, which the mayor’s budget would only fund through June of next year. Durkan’s budget plan boasts that she’s created over 500 new shelter beds this year, but she’s counting shelter beds created by nonprofit organizations, not just the city. Of that total, only 146 beds are available for The Navigation Team to use when referring people off the street. Meanwhile, by cutting funding to SHARE/WHEEL for the second half of 2019, Durkan would permanently remove 217 shelter beds.

Durkan claims that it’s better to add enhanced shelter beds—shelters that provide case management and other services—than to continue funding basic shelters that provide only a place to sleep at night. But the difference in costs between the 2 options is dramatic: existing basic shelter beds cost the city about $4,900 per year, while new enhanced shelter beds can cost as high as $37,000 per year.

While mental health, case management, and addiction services are necessary for some folks, many other homeless folks are living out of their cars, or are just in need of a warm place to sleep at night, which is why Durkan doesn’t completely defund all basic shelter beds in her budget: the Downtown Emergency Service Center will continue to receive funding for the basic shelter beds that they provide. And Durkan’s budget provides funding for nighttime parking spaces for people sleeping in cars and RV’s.

So, the cut to SHARE/WHEEL funding is clearly a political move, based on Durkan’s (and by extension, her supporters’) hostility to the self-management model of those shelters. SHARE/WHEEL has long believed that most homeless people know perfectly well what they need—resources and material support, and not paternalistic guidance—and are therefore capable of managing their own shelter environment. Sometimes this creates problems, as when a shelter elects a person to run an encampment who turns out to have dictatorial tendencies, but then Democracy is never perfect, as we all know.

Durkan and her supporters within the business community prefer their own model: assuming that all homeless people are childlike and in need of success training, they prefer to view homeless people as “clients.” In their view, the Capitalist system is a game, and some people just need better training in how to play it. Anyone who lacks material goods is merely incompetent or poorly indoctrinated; they’re never a victim of bad luck, bad health, discrimination, unscrupulous corporations, or an uneven playing field. Hence, Durkan’s policy would process all homeless people through enhanced shelters with required case management, treating homeless people like children instead of adults who already know what their basic needs are.

Where the Durkan model really fails is in providing no exit from enhanced shelters, and no understanding of the forces that create homelessness in the first place. While Durkan boasted a 3% increase in funding for affordable housing, that 3% will be eaten up by inflation, which has increased by over 3% since last year. Without additional investments in affordable housing, there will simply be nowhere to permanently house people trying to get off the street.

And rising rents and housing costs are a main contributor to the growing number of homeless on our streets. Which is why Mayor Durkan’s cuts to homelessness prevention services are so shocking, and make no sense whatsoever. This may be why City Councilmember Deborah Juarez, who usually exerts herself only for her constituents in North Seattle, proposed adding back $400,000 for homelessness prevention funding for groups like the Ballard Food Bank and Seattle Helplines. To see Juarez make such an unusual move really highlights how extreme Mayor Durkan’s budget is. With this cut alone, Durkan proves herself to be a Republican in Democrat’s clothing.

City Councilmember Teresa Mosqueda has proposed, three years after Mayor Ed Murray announced a state of emergency over homelessness, that the city finally treat it like a real emergency. She has proposed spending $3 million to erect a mass tent shelter similar to the ones in Tacoma and Los Angeles. The big tent would be an enhanced shelter with showers, storage lockers, restrooms, laundry, and case management and mental health services available to its tenants (but they would not be required to use all of those services). The idea would be to provide the resources people need to get back on their feet, similar to a response after a natural disaster.

Mosqueda also proposed adding $388,716 into the budget to tackle the spread of communicable diseases among the homeless. This comes after a recent outbreak of HIV among homeless drug users in North Seattle, and an outbreak of Hepatitis A among several homeless populations in California.

Councilmember Mike O’Brien has also proposed setting aside $300,000 that community-based organizations can use to create new emergency housing, which would turn the provision of shelter space into something that communities can choose to do on their own, in spaces they select themselves. This presumably would take some pressure off the City Council from neighborhood NIMBY’s.

Tenant Protections

In a further push to prevent homelessness, the council took a closer look at tenant protections within the Department of Construction and Inspections. DCI doesn’t just issue permits to developers, it inspects buildings, monitors vacant buildings, and manages a program to address landlord/tenant issues.

Councilmembers Herbold and O’Brien have proposed that the city work to speed up its response to tenant safety and health complaints—one of the main routes through which tenants are displaced. Herbold also proposed adding back money that Mayor Durkan had cut for the Vacant Building Monitoring Program. Herbold’s proposal would establish a fee to cover the cost of the program, and charge penalties to property owners who don’t keep their buildings in good shape. This would create an incentive for property owners to either keep their properties occupied and up to code, or else sell properties that they lack the resources to manage. The idea is to discourage investors from buying older buildings, neglecting them so that all the tenants leave, then tearing them down and redeveloping or selling them to the highest bidder for redevelopment.

In addition, Councilmember Sawant proposed adding $700,000 to fund legal services for tenants facing eviction, and to fund outreach to vulnerable populations about their rights as tenants, including people of color and the LGBTQ community.

Two New Taxes

Last year, the City Council voted to establish two new taxes in Seattle, the Short-Term Rental Tax, and the Sweetened Beverage Tax.

The Short-Term Rental Tax was meant to discourage landlords from turning apartments into lucrative, short-term, vacation rentals on Airbnb and other online platforms. Tenants’ rights groups and the hotel/motel lobby pushed hard for this tax. When the council voted for it, they included a list of what they wanted the money collected from the tax to be spent on: 1) the first $5 million on investments in community-initiated equitable development projects, 2) the next $2 million on affordable housing, and 3) the remainder on community-initiated equitable development projects, including any affordable housing component.

Now, a quick word on “community-initiated equitable development” projects: these are supposed to be projects that benefit communities of color and that are initiated by those communities. The city has an interesting document which describes it goals in relation to equitable development, which can be found here: https://www.seattle.gov/dpd/cs/groups/pan/@pan/documents/web_informational/p2555173.pdf.  In the past, the city lacked a dedicated source of funds for equitable development initiated by communities of color, and the City Council saw the Short-Term Rental Tax (STR) as a way to address this shortfall.

Mayor Durkan, lacking a vision for equitable development, saw the STR as a new revenue stream that she could us to fund staff salaries and consulting fees, as well as already existing housing programs. So the council swung into action.

Councilmember O’Brien has proposed that the STR be set aside in its own fund, so that the council can keep better track of the revenue collected and what it’s being spent on. He also proposed moving the $1 million of STR revenue that Durkan would use to fund staff salaries and consulting fees to pay for direct grants for community equitable development, just as the Council envisioned. And Councilmembers Mosqueda and Herbold proposed that the city explore whether STR revenue can be used to pay interest on bonds for affordable housing projects (instead of existing housing programs).

When the council passed the Sweetened Beverage Tax (SBT) last year, they specified that the money collected from the tax would be used for new programs to expand access to healthy and affordable food, and programs to benefits children and families. Mayor Durkan, on the other hand, proposed shifting money from the SBT to fund existing food programs.

Councilmember O’Brien, naturally, proposed setting aside the SBT collections into a separate pool of money, and that the money be used according to the council’s original vision of the program (just as he had done for the Short-Term Rental Tax).

And Councilmember Mosqueda proposed that the city explore whether SBT money could be used to pay interest on bonds for building and renovating community health facilities, like P-Patches, health clinics, and early learning centers.

You can see a pattern here: the council passes taxes for new services, which Mayor Durkan then tries to appropriate to pay for existing program that were previously paid for out of the General Fund. Then Durkan turns around and uses that freed-up General Fund money to pay for the new stuff she wants, like police salary increases, hiring 40 more cops, new computers in the city’s police cars, and a 38% funding boost for The Navigation Team.

This closer look at just a few items in the mayor’s budget exposes Durkan as a conservative, law-and-order Democrat, willing to cut social services when necessary to fund her pet “public safety” projects. She’s far from the progressive Democrat that she claimed to be when she ran for office last year.

As for the individual councilmembers, I’m favorably surprised by Mike O’Brien’s efforts to maintain council control over the direction of city government. Councilmember Herbold works in the same vein, and together they constitute the institutional memory of a progressive caucus on the council, with its efforts to address lingering problems like homelessness, hunger, and racial equity.

In addition, Teresa Mosqueda is making the most of her first year in her first term on the council to push hard for racial justice and affordable housing.

Meanwhile, I’m left wondering about the other councilmembers. Many of the above issues impact Bruce Harrell’s constituency the most. As representative for District 2 in South Seattle, he should be looking for ways to increase affordable housing, address the causes of homelessness, and ensure racial equity within city operations. But in a year in which he’s serving as Council President, he is mostly absent on these vital issues.

Meanwhile, Sally Bagshaw, as the representative for District 7 (downtown, Belltown, Queen Anne & Magnolia), clearly supports everything Durkan does without question. Bagshaw is representative of the wealthy folks who live and work in her District, including the downtown business community and big developers.

Speaking of developers, Rob Johnson, who represents District 4 in Northeast Seattle, seems eager to cash in on the build-out of the University District and destroy much of what’s left of affordable housing north of the Ship Canal. His disinterest in homelessness and human services appears to be a symptom of that pandering.

And finally, Lorena Gonzalez, who sits in one of only two at-large seats on the council (Teresa Mosqueda holds the other one), has long promoted her bona fides as a woman of color. Yet, where is she on two issues that matter deeply to people of color in Seattle: affordable housing and displacement? We can only hope that she adds a fifth vote to pass many of the above proposals. But, unfortunately, we can’t be confident that she will.

The council is expected to begin voting on amendments to a budget reconciliation bill starting on November 7th. The process is expected to take a week or so, and usually ends before the Thanksgiving holiday. There’s still time to contact your councilmembers to express your opinion on the budget:

District 1 – West Seattle and South Park
Lisa.herbold@seattle.gov
206-684-8803

District 2 – South Seattle
Bruce.harrell@seattle.gov
206-684-8804

District 3 – Central Seattle
Kshama.sawant@seattle.gov
206-684-8016

District 4 – Northeast Seattle
Rob.johnson@seattle.gov
206-684-8808

District 5 – North Seattle
Debora.juarez@seattle.gov
206-684-8805

District 6 – Northwest Seattle
Mike.obrien@seattle.gov
206-684-8800

District 7 – Pioneer Square to Magnolia
Sally.bagshaw@seattle.gov
206-684-8801

Position 8 – Citywide
Teresa.mosqueda@seattle.gov
206-684-8806

Position 9 – Citywide
Lorena.gonzalez@seattle.gov
206-684-8802

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