It’s not that Seattle Times columnist Danny Westneat is wrong when he points out that our progressive city and county agenda of preserving Metro bus service, providing a stable funding source for city parks, and expanding high-quality preschool comes at a high cost. It certainly does. But if he’s going to describe the price tag as “steep,” then we need to have a little more context. For steepness is a measure of the relative elevation from Point A to Point B—and while Point B is not in dispute, the location of Point A is a bone of contention.
Yes, the county is asking voters for $130 million a year in car tab and sales tax revenue to stave off a 17 percent cut in Metro bus service. And yes, Mayor Ed Murray wants to go to the ballot with a $56 million a year parks district. And yes, the universal preschool measure the council is currently developing could ultimately cost Seattle taxpayers another $30 million to $70 million annually. Westneat isn’t exaggerating the numbers. That’s a lot of new taxes.
But “new” based on what? Our current diminished tax based? Or the city and county tax base we enjoyed before a series of tax-limiting statewide initiatives were passed against the will of Seattle and King County voters?
Take Metro, for example. Prior to the passage of Tim Eyman’s $30 car tab fee Initiative 695 in 1999, Metro relied on a relatively stable Motor Vehicle Excise Tax (MVET)—a tax on the value of your car—for about one-third of its operating revenue. King County voters rejected I-695, but it passed statewide, so the legislature granted Metro some additional sales tax authority to make up the difference. Unfortunately, sales tax revenue is much less stable than MVET, and when the economy collapsed in 2008, so did Metro’s funding. From 2009 through 2015 Metro will collect $1.2 billion less in sales tax revenue than previously projected.
That averages to $200 million a year in reduced tax revenue, far more than the $130 million a year Proposition 1 would raise.
Seattle tax revenues have been similarly slashed thanks to an Eyman initiative: I-747, which again, was rejected by Seattle and King County voters, but was approved statewide in 2001. I-747 limits growth in regular levy property tax revenues from existing construction to an absurd 1 percent a year—far below inflation. A 2012 report from the Seattle Parks Foundation concludes:
As a result of Initiative 747 alone, the City of Seattle’s property tax collections in 2010 are at least $60 million less than if the measure had not passed. The impact of the loss is compounded each year the limits remain in place, so annual losses increase by approximately $15 million per year, meaning that the estimated loss for 2011 will be at least $75 million. This estimate assumes the City Council would have limited the tax increase to the rate of inflation in the City’s labor costs (3.5 percent to 4.5 percent annually, which includes the cost of health care). If one assumes the City Council would have increased property tax to the statutory limit of 6 percent per year, the 2011 loss would be $126 million.
Taking into account compounding, and using Eyman’s own framing, I-747 will save Seattle taxpayers between $135 million and $186 million in 2015 alone, the first year any of the new taxes Westneat mentions would take effect. That’s far more than the combined annual cost of a parks district and universal preschool!
Such a bargain!
Yes, in both cases we’re talking about substantial tax hikes above what taxpayers are currently paying. But they amount to substantial tax cuts from what taxpayers would have been paying today had not I-695 and I-747 been forced on us by statewide voters. Indeed, the only reason we are going to voters with tax hikes to fund bus service and parks is that I-695 and I-747 left the county and the city without sufficient revenues to sustain these crucial services!
So are the costs high? Sure. It’s expensive to maintain the high-quality public infrastructure we want and need. But are these tax hikes “steep”…? Not if your starting point is the more rational local tax structure we enjoyed just a decade and a half ago, before that two-bit fraternity-watch salesman started fucking with our tax base for fun and profit.