Search Results for: inflation

The Seattle Times editorial board urges Gov. Gregoire to be “careful” regarding the state budget…

Its additions were modest, and the $0.015 billion the governor vetoed was helpful in that regard. So was the $0.85 billion ending savings account. But these changes were on the top of a total — $33.7 billion in a two-year cycle — that was not modest. In four years, state spending has risen by 33 percent. […] Some of this spending was necessary. But the across-the-board spending has meant the state was not able to lower taxes in any substantial way.

Yeah, well, there are reasons to be careful regarding the state budget in the face of an antiquated tax system that virtually assures a longterm structural deficit, but not for the reasons the Times suggests. Indeed, every time they trod out Rossi’s intentionally misleading “33 percent” number — without offering readers the appropriate budgetary context — the Times does a great disservice toward the cause of fiscal stability.

Yes, the state budget has grown by about a third over the past four years, and no, that rate is not sustainable when compared to longterm budget forecasts, but our state government’s growth has absolutely been “modest” by any meaningful economic measure. In fact, a January 2007 analysis by the Washington State Budget & Policy Center clearly shows that general fund spending under Gov. Gregoire has merely followed the same trend established during the 1990s.

The Times would have you believe that it was the spending increase under Gov. Gregoire’s watch that is the anomaly, when in fact it was the slower spending growth during the national recession and tepid recovery that actually fell below historical growth levels. Gov. Gregoire’s budget merely returned the state to the established trend.

Indeed, as a share of the total state economy, Gov. Gregoire’s budget actually represents a reduced investment — a smaller share of state resources than any of the six budgets that directly precede it.

Anti-government/anti-tax critics can spout all they want about rising spending and per-capita tax increases, but those numbers are entirely meaningless when taken out of context… as they usually are. Read the academic literature and you will find that the most common metric used in comparative studies of government spending, and for analyzing the relative growth of both expenditures and revenues, is spending/taxation as a percentage of personal income.

The reason is twofold. First, the economic metric that most closely tracks long term growth in demand for government services is growth in total personal income. That is because many of the services provided by the government are commodities, and as personal income increases, so does consumption. As our state grows wealthier, demand for government services increases faster than population plus inflation.

The other reason to focus on personal income is that it is the only metric that tracks individual taxpayers’ ability to pay. The state invests in things like transportation and education and law enforcement — investments that provide the infrastructure necessary for our economy to grow and for all our citizens to prosper. Thus a spending increase, even when accompanied by an increase in marginal tax rates, does not increase the real burden on individual taxpayers if it results in a corresponding increase in personal income.

So how does our state stack up in terms of state and local taxes as a percentage of personal income? Again, according to the Budget & Policy Center, Washington currently ranks 36th nationwide… and falling.

There is a legitimate debate to be had over the proper size and scope of government, and the priority in which we make public investments, but it is fundamentally dishonest to enter this debate by reinforcing the common misconception that our state government is out of control, when by the most meaningful measure — the government’s total share of our state’s economic resources — even a four-year 33-percent increase represents a decline from historic trends. And it is equally dishonest to profess a concern for fiscal responsibility by focusing solely on budgetary expenditures while refusing to address the revenue side of the equation.

Washington state not only boasts the most regressive tax structure in the nation — one in which the bottom 20% of wage earners pay a whopping 17.6% of income in state and local taxes while the wealthiest pay only 3.1% — our tax system is also based on an antiquated, early 20th century model that over-relies on an ever shrinking portion of our 21st century economy: the manufacture and sale of goods. Economic booms can mask this structural deficit in the short term, but because our economic growth is increasingly occurring in sectors that remain un- or under-taxed, longterm revenue growth simply cannot keep pace with growth in demand for public services… at least not without raising marginal tax rates, shifting an ever greater burden on exactly those families who can least afford it.

The Times and other critics have repeatedly cautioned about unsustainable budget growth while refusing to articulate which programs and services they would see slashed, or displaying an ounce of willingness to discuss the kind of fundamental tax restructuring that might allow state and local government revenues to reliably keep pace with both economic growth, and with the growth in demand for public services. If the Times editorial board wants a smaller state government — if they want to see less per capita real dollars spent on education, transportation, law enforcement, children’s health care, and other essential services — they should just come out and say it; we would all benefit from an honest debate. But the sort of disingenuous budgetary “concern trolling” they display in today’s editorial adds absolutely nothing to the discussion.

On the same day Washington was ranked amongst the top three most effective state governments, Gov. Christine Gregoire helped demonstrate how she made the grade by announcing revised plans that would replace the 520 floating bridge two years sooner and at as much as $700 million below previous estimates. Much of the savings come simply from accelerating construction, thus avoiding anticipated inflation of concrete and other materials.

The accelerated schedule is achieved through a number of means, including expediting the environmental permitting process and beginning construction on the rest of the 520 corridor sooner than originally planned, but much of it is due to advancing pontoon construction at two facilities simultaneously. Construction on smaller pontoons will now begin in 2009 at an existing facility in Tacoma, while construction on a new facility at Grays Harbor will begin in 2010, with production coming online the following year. Pontoons from both facilities will be floated through the locks, and into Lake Washington, where they will be assembled on site. This accelerated construction plan also has the ancillary benefit of creating hundreds of new local jobs at a time the national economy is headed into recession.

The proposal calls for a six-lane bridge — two general purpose lanes and an HOV lane in each direction — and will avoid the need for a draw span by raising the clearance on the Eastside approach. The bridge is designed to be expandable, with the ability to add new lanes or rail capacity by attaching a new row of pontoons to one side, and is now scheduled to be completed by the Fall of 2014, with full 520 corridor improvements to be finished by 2016. The total project will be financed by $1.7 billion in state and federal money, and as much as $2 billion in tolls.

In a letter to legislative leaders, Gov. Gregoire explained that the revised plan came in response to a request she made to WSDOT in January to explore all options for accelerating construction. Credit surely goes to WSDOT for rethinking the construction plan and finding the savings in both time and money, but credit also goes to Gov. Gregoire for pushing this process along.

Check out these two stories, and connect the dots.

Seattle Times:

An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.

Between 1989 and 2006, the median inflation-adjusted price of a Seattle house rose from $221,000 to $447,800. Fully $200,000 of that increase was the result of land-use regulations, says Theo Eicher[…]

This is a popular talking point for some conservative or liberatarian think tanks, and it is often employed when attacking a certain landmark 1990 bill:

A key regulation is the state’s Growth Management Act, enacted in 1990 in response to widespread public concern that sprawl could destroy the area’s unique character. To preserve it, the act promoted restrictions on where housing can be built. The result is artificial density that has driven up home prices by limiting supply, Eicher says.

I want to sidestep the politics here and take you to Erica C. Barnett’s recent column in The Stranger:

Growth management—which calls for concentrating growth in areas that are well served by transit, encouraging people to live close to where they work, and discouraging or banning new sprawl that promotes driving and harms the environment—isn’t working.

[…]

Growth management needs teeth to work. That means smaller growth-management boundaries, real limits or even a ban on growth outside those boundaries, affordable housing incentives in cities and inner-ring suburbs, sensible policies to encourage trip reduction, and land-use decisions that encourage tall, dense developments in cities and already dense suburban areas.

First, a few thoughts about that UW study:

The nearly 200k they reference includes lots of things you’d hate to see eliminated from your neighborhood. Without money for sidewalks, parks, or schools, our neighborhoods would suffer. Without a design review, folks would go nuts at the idea of another condo building and no means to influence its design, adn that’s something we value. Growth is supposed to pay for growth, even if it bumps up the sticker price on one of those crappy Quadrant homes.

Erica does get a lot of things right. Cities should build more within their own boundaries, so that the ‘burbs look a bit more like the good neighborhoods of Seattle. Anti-density NIMBYs here in town shouldn’t get to hog the housing agenda. Also, transit isn’t a panacea for sprawl. Then again, nothing is.

The people buying houses in and moving to places in Snohomish and Pierce counties are doing so because that’s where they can afford to buy a house. (I’m guessing that King County is omitted because even the shitty parts of it are getting pricey.) It’s supply and demand; not enough of the former and too much of the latter. Adam Smith is biting us in the ass.

We have constricted our housing supply. I don’t think constricting it further would have the effect Erica is looking for. People have proven to us that they will drive for hours (with the price of gas not a limiting factor until it nears 10 bucks a gallon) just to get a three bedroom ranch-style for less than 250k. Some folks will want to live in the city in a townhouse or condo, and some will want the picket fence. Can’t help that.

[As an aside: I’ve noticed that some NIMBY-types from Seattle lash out at sprawl in the ‘burbs while at the very same time complaining about condos in our neighborhoods. As a person who’d like to live in the city and NOT drive miles to my job, I find it odd that Seattle’s urban closed mindedness could be just another cause of sprawl.]

The Dow plummeted 450 points this morning in early trading, as traders responded to a worldwide plunge in share prices over the MLK holiday, and a second straight day of near-record losses in the Asian markets. How concerned are the experts? The Federal Reserve attempted to fend off a US crash by slashing interest rates three quarters of a point just before the opening bell, prompting respected financial blogger Bonddad to describe the Fed as “Wall Street’s bitch.”

The problem is liquidity isn’t the issue — it’s counter-party risk. So long as lenders are

1.) Concerned about getting repaid on existing loans and

2.) Concerned that a party might now repay even a short-term loan

3.) In the middle of writedown hell.

Then loans aren’t going to get made. It’s that simple.

Also note the the effective Fed Funds rate is now negative. The yearly increase in inflation is 4.1% and the Fed Funds rate is now 3%, meaning the effective Federal Funds rate is in fact -1.1%. This is the situation that got us into this mess.

Of course, even an impending worldwide recession has its bright spot, with crude oil prices dropping below $88 a barrel in anticipation of reduced demand.

And by the way, in case anybody is keeping score, the Dow Industrial Index closed at 10,678 on January 18, 2001, the day President Bush was sworn into office. Last time I checked it was still below 12,000 points, even after recovering about half the early morning losses. A 12% return over seven years… below the rate of inflation. Wow. Those Republicans sure do know how to run the economy. (By comparison, the Dow closed at 3,242 on January 20, 1993, the day President Bill Clinton was inaugurated, more than tripling in value over Clinton’s two terms.)

We plead guilty to a certain shall we say crankiness when surveying the mainstream headlines for scraps of local edification, but hey folks, we’re just tryin’ to help. Our intentions are good, please don’t let us be misunderstood. So when we earnestly inaugurate a feature called Local Headlines That Ran Elsewhere, we’re not saying the headline or story never ever ran in local media. We’re merely pointing out recognition by the Outside World of our humble region. “Seattle Man Bites Renton Dog” in The New York Times is probably of interest no matter how many times the story has run in the P-I. And when we decry the lack of a Big Picture in local reporting, we’re merely suggesting that an awareness of, and linkage to, larger forces at play help provide a context to make readers care. “Cat Climbs Tree in Ballard Before Earthquake” is not nearly the story that “Thousands of Cats Throughout Northwest Take to Trees Before Earthquake” is.

If you are distraught at having stumbled into Journalism 100.5, then yes, you can correctly surmise that this is an extremely slow headlines day. I’m writing this at 12:30 a.m., waiting for The Times Web site to flip, the P-I having provided me with “Sometimes Scanners Get Price Wrong” (Good Lord, now I’ll never get to sleep!) and “Neuheisel Eyes Successful Return” (and even if I do, my worst nightmare will be confirmed). Of course, the scanner story doesn’t mention what to do when you’re undercharged, which in my experience happens more often. Leave it to the press to out one of consumers’ few weapons against rampant inflation. Hopefully Costco management won’t see this one.

I would be remiss not to tip my hat to Times senior political writer David Postman for his generous acknowledgment in The Stranger of my conversation with my daughter a week ago, wherein I informed her that our beloved Crocodile, where Franz Ferdinand, Turin Brakes, Tapes ‘n Tapes and so many other uncommercialized rising bands had provided so much personal joy and temporary deafness, was closing its sticky grimy doors. But this was hardly my scoop, as I noted in Tuesday’s headlines post. My only reason for bringing up the thing was to give The Weekly credit, which is more than our friends at Slog have. Not to slight them in the slightest: I was just thinking how wonderful it is to have Erica C. Barnett back rattling the cages at City Hall (which were notably undisturbed by any local media during her absence), so much so that I almost forgave her for taking yet another interminable vacation, this time with a paucity of posts that she blamed on lack of Wi-Fi. This of course being the current reporter’s “headache and flu” excuse after a night of carousing, my all-time favorite being, after a reporter called in with a bad back, his editor’s observation that the female reporter he was with the previous night was no doubt going to call in with a bad front.

At Erica’s age I was getting two weeks of vacation and wasn’t paid enough to go to Italy Barcelona, or even Austin. But it seems only fair that someone who does the work of three reporters get commensurate time off. Welcome back Erica. Now tell me what Conlin will do as the next Council president…

Ah yes, The Times site has flipped, and the lead is lead: High lead levels in kids’ jewelry, a lamentable but unsurprising development to HA readers of Goldy’s scoop yesterday, sprinkled liberally with insights and calls to action, the way real journalism is supposed to work.

Addendum: Somehow in my blurry-eyed mumblings I missed the P-I coverage of the homeless rally last night. Nothing in The Times, which apparently is content to stick with Nicole Brodeur’s boneheaded revelations of a couple weeks ago (although a search did turn up a creditable report on Gates Foundation efforts for homeless families). The best discussion of course resides at Real Change and its editor publisher Tim Harris’ great blog. Give an RC vendor a fiver next time around, it’s Christmas folks.

Tonight on “The David Goldstein Show”, 7PM to 10PM on News/Talk 710-KIRO:

7PM: Special Session or Special Olympics?
Our Democratic leadership sure is “special” aren’t they, if they think a revenue cap below the rate of inflation is either good politics or good policy? The Stranger’s Josh Feit was down in Olympia for Thursday’s debacle and he joins us in studio for his first hand take and a discussion of the inevitable fallout.

8PM: Does WalMart have an obligation to treat its workers fairly?
A class action suit was filed this week, alleging as many as 75,000 were illegally denied overtime pay and work breaks. Tough shit for the workers? Or does WalMart have an obligation to treat them fairly?

9PM: Are we squandering America?
Robert Kuttner is the co-founder and co-editor of The American Prospect magazine, and the author of a new book, “The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity,” and he joins us in studio for the hour. With wages stagnating and the gap between the very rich and everybody else growing ever wider, Kuttner argues for a return to the “managed capitalism” that guided the great economic expansion from 1948 to 1973, an era during which the U.S. economy, wages, and incomes flourished, and a rising tide really did lift all boats. Kuttner appears tomorrow night, 7:30 PM at Seattle’s Town Hall, for a book reading and signing.

Tune in tonight (or listen to the live stream) and give me a call: 1-877-710-KIRO (5476).

I’ll save the venting for tomorrow night’s show when The Stranger’s Josh Feit will join me in studio to give his first-hand account of the proceedings at yesterday’s special session, and the inevitable fallout from the Dems’ boneheaded political blunder. But I just want to take time to thank those Democratic legislators who stood up to the political pressure, and voted against rashly reinstating I-747’s unsustainable and irresponsible one-percent cap on regular levy revenue growth.

Yesterday I wrote, “I’d be surprised if a majority of the Seattle delegation didn’t vote to approve the governor’s plan,” and, well… I was wrong. There are six legislative districts that represent Seattle, for a total of twelve representatives and six senators. Of those, only one senator and four representatives voted for the bill, with two representatives excused and not voting. A total of eleven Seattle legislators cast votes against the bill: Senators Ken Jacobsen, Adam Kline, Jeanne Kohl-Welles, Joe McDermott and Ed Murray, along with Representatives Mary Lou Dickerson, Sharon Nelson, Jamie Pedersen, Eric Pettigrew, Sharon Tomiko Santos, and Helen Sommers. I was particularly proud that my entire 37th Legislative District Delegation — Kline, Pettigrew and Santos — voted against the bill.

Only a handful of non-Seattle legislators bucked the governor’s pressure to quickly pass dumb policy. In the House, special kudos go to Rep. Geoff Simpson of Covington, who voted his conscience despite the fact that his district overwhelmingly supported I-747, and despite the fact that he feared this vote could potentially end his political career.

“I’m not here to make decisions based on whether or not I’ll get re-elected,” he said. “I’m here to make decisions that are good public policy … 747 is not good public policy.”

Simpson said local government can’t be expected to provide high quality services when revenues are not keeping pace with the rate of inflation.

While he was aware of the risks, Simpson said he hoped voters in his district would consider the sum of his voting record, not just this one vote.

That’s what representative democracy is all about. In the Senate, Craig Pridemore of Vancouver made a similar principled stand, again, knowing the political risks coming from a district that overwhelmingly supported I-747:

“I’m a former county commissioner. I know the impacts this will have on local government, law enforcement abilities, and all of the other critical local services. I can’t vote yes for that,” he says.

No doubt Pridemore and Simpson’s opponents will attack them as arrogant and out of touch, but this is exactly the sort of principled leadership voters so often decry as missing in our elected officials. If we want our legislators to mimic the polls rather than make informed decisions, we might as well just eliminate the Legislature entirely.

Part of the frustration with reading local daily media is, as HA denizens know, the failure of perspective. It’s sort of like hiring a contractor to build you a deck, and the guy shows up with the tools and supplies and lumber and says, with a wave goodbye, “Figure it out yourself, bub.” So when the P-I and The Times both run stories that a judge has released police reports on Councilman McIver’s arrest, one would kind of like to know why the reports were not released in the first place. That might be a topic worth explaining. And why, if they were withheld before, they’re being released now. This all falls under the heading of media transparency, which means media as well as the cops and courts should be working for you and me, the reader and the public, and not for the privileged and powerful. What the McIver case has become is a poster child for domestic abuse prosecution. The Weekly stirred this pot a few weeks ago, but dailies updates on the case show almost no sense of a larger context: OK, reader, you figure it out. Goldy and I have both observed that in another metro this probably would not be the case; it certainly isn’t in S.F. and Philly.

The housing crisis is another huge local story with virtually no enlightened reporting. Yes, we’ve got the guys showing up with the boards and bricks. The P-I took a stab last Saturday, even including a nearly useless “What’s A Townhouse?” sidebar, and again today with a report on Seattle slipping from No. 1 in housing price increases. One nugget worth noting: “The 4.7 percent change is healthier and more sustainable than the double-digit appreciation the Seattle area saw in prior years, Crellin said Tuesday.” Funny, I never saw a reference to “unhealthy” and “not sustainable” in real-estate stories during the boom years.

To be fair, Seattle is a trailing edge indicator. Housing nation-wide is in a precipitous plummet, down 4.5 percent for the quarter in the worst drop since at least 1988. It was almost spooky during my recent Bay Area visit to hear and see almost no signs of home construction. For years the sawing and hammering and cement trucking has been incessant and pervasive. If Seattle goes as S.F. goes, we ain’t seen nothin’ yet. The problem with stat-based reporting is the unavoidable data latency. No one walking around Seattle’s once-hot neighborhoods actually believes prices are going up 5 percent. They’re already in decline, and with all the still-unfinished (an unpainted, girder-visible condo on Phinney that just got glass in the windows has a hilarious banner, “Move in this December!!!!”) housing coming on the market, they’re not going back up any time soon. Year-to-year comparisons disguise this, of course, giving no sense of street trends and acceleration. (The stat to watch for, which apparently the locals don’t understand, is number of sales and time on market. Housing prices may hold, but if there’s huge inventory and little turnover, as can happen in a tony neighborhood, the real truth is a cancerous psychology.) And then there’s a bogus inflation index (Krugman has been nailing this in the NYT, pointing out how figures ignore staples like bread and gas), which undermines supposedly inflation-adjusted graphs like this one, skewing the housing boom even more.

Media don’t really want to report dire real-estate news, since housing ads are one of the few revenue streams still buttressing the news business. So it comes as little surprise that the big story is being ignored: How does all this affect those bullish transportation and housing forecasts, fed in big part by Mayor Nickels’ insatiable boosterism of 50,000 new jobs and 22,000 additional housing units. For a stampede, I haveta say it’s awfully quiet out there.

Finally, as a coda to our Cyber Monday skepticism, there’s today’s joy and exultation over a 21 percent sales jump, put in true perspective only if you factor in a 38 percent increase in buyers. So sales increasing, but number of buyers increasing even more, means…guess you’ll just have to figure that out for yourself, bub.

I’ve made no secret of my disdain for the special session Gov. Gregoire has called for this Thursday to reinstate I-747’s vindictive one-percent cap on regular local levies. From a policy perspective, a hard cap on revenue growth below the rate of inflation is simply irresponsible. From a political perspective, this cowardly and ill advised capitulation not only makes the governor look weak at a time she needs to project strength, but it will make it very difficult for some in the Democratic base to generate the kind of enthusiasm Gregoire might need if Dino Rossi doesn’t stumble. I’m just sayin’.

Of course, the governor doesn’t deserve all the blame, as I doubt she would have called this special session if she didn’t believe she had the backing of the Democratic leadership. Here we had a golden opportunity to debate and propose progressive property tax reform that would truly benefit those homeowners who need it most, and Frank Chopp and company seem happy to just quickly sweep the issue under the rug and get back to the business of expanding the Democratic majority. Um… to what end?

That said, there does seem to be some good news coming out of the state Senate, where more than a few Democratic senators are voicing their concern over rushing through the governor’s emergency legislation. After talking with several senators and staffers, it appears support is now coalescing around a proposal to temporarily reinstate I-747’s limits through January of 2009, giving the legislature the time to hold the kind of public hearings the initiative never received, while fully debating various alternatives. This is a proposal I and many other tax fairness advocates could support, as it provides adequate time for careful deliberation. It is also a reasonable and responsible compromise that allows Democrats to reject I-747’s permanent reinstatement without handing Gov. Gregoire and embarrassing defeat.

Under one scenario being discussed, the legislature would ultimately put a referendum on the 2008 ballot, giving voters a choice between the existing one-percent cap and a comprehensive package that might include a circuit breaker or property tax homestead exemption that targets substantial benefits to the majority of homeowners. Personally, I’d rather legislators just do their job and legislate, but I can understand the political advantages of a referendum.

But whatever the final package, it couldn’t be much worse than what the governor is proposing: a below-inflation cap and a deferral program that provides only a short term bandaid, and to very few households. The problem is not that our taxes are broadly too high, but that they are too regressive, imposing the greatest burden on those who can afford to pay the least, and unless we address this core issue, our state and local governments will never be able to adequately address the many pressing issues facing the citizens of Washington state.

I suppose Gov. Chris Gregoire thought she was dodging a political bullet by calling a special session to reinstate I-747’s 1-percent revenue cap on regular levies, but…

In the meantime, Republicans, Eyman and Republican gubernatorial candidate Dino Rossi criticized Gregoire for her response to the high court’s ruling.

“The incumbent is not leading — she is reacting and slowly,” Rossi said.

Well, how the fuck did she think they would respond? Did she really think she’d earn brownie points with the anti-tax crowd? Does she really believe Republicans will vote for anybody but a Republican, regardless of how much she panders to them? Does she really take the Democratic base this much for granted?

The sad thing is, this is one of the few times Rossi is actually right… well, sorta. Gregoire is reacting rather than leading on this issue, but if anything she’s moving too fast. Calling a special session to reimpose I-747 is not only bad policy, it is bad politics, and it will cost Democrats in both the short and long term. As much as I hate to write it, Gregoire’s response to the recent court ruling is as ill-conceived and irresponsible as the initiative itself.

Now I suppose it is possible that this is not just a monumental political miscalculation, but rather, that Gov. Gregoire really does believe that calling a special session to reinstate I-747 is the right and prudent thing to do. But if so, I would hope she could explain how capping local tax revenue growth below the rate of inflation is in any way an act of responsible governance? If the initiative had imposed a similar cap on state revenues, forcing state budgets to steadily shrink year to year in real dollars, even as energy and health care costs soar, would Gov. Gregoire fight so hard to reinstate it? I kinda doubt it.

Yet that’s exactly the fate to which she is condemning local governments, the end result being an endless parade of lid lifts and special levies on the ballot that will ultimately lead to voter fatigue, if it hasn’t already done so. If you want to undermine the ability of government to govern — if you want to set up the Democratic majority for failure — this is exactly the way to do it.

I just can’t tell you how disappointed I am with both the governor and the Democratic leadership. (I could try, but it would involve an awful lot of swearing, even for HA.) This was an opportunity to impose a reasonable cap — say, four-percent or inflation, whichever is lower — while enacting progressive property tax reform. Instead they’ve chosen to cave to Eyman and Rossi, while offering a half-measure in the form of tax deferrals. I suppose I’ll have to wait until I see the details to comment more fully, but a deferral is generally little more than that, and would do absolutely nothing to address our most regressive tax structure in the nation.

I guess Gregoire and her people are trying to play it safe in an election year, but playing it safe is how she almost lost in 2004. And it’s a terrible way to kick off 2008.

Dear Pro-Roads/Anti-Rail Guys,

Fuck you. No really… fuck you.

And I’m not just saying “fuck you” out of anger, though hell yeah, I’m pretty damn pissed right now. No, I want you to remember this post as a threat of things to come, rather than just a cussing out for deeds past, for mark my words, you’ve made an enemy, and I hereby promise to do whatever I can to stick Prop 1 so far up your ass you’ll be wiping shit out of your ears with a Q-tip.

You see, you think you were so clever with your $157 billion lie and your SOV-loving Seattle Times endorsement and the way you used the dupes at the Sierra Club to cover for your selfish, car-fetish agenda. But while you may very well have succeeded in killing light rail expansion for a decade or three by defeating Prop 1, I’m going to do my darnedest to turn lemons into more lemons — bitter, spiteful lemons — and vehemently oppose any and all road or bus proposals that subsequently come down the pike. And you know what, I’m guessing that there are an awful lot of Seattle voters who are with me on this.

See, we didn’t just vote to defeat I-912 and preserve the gas tax increase, we progressives fought like hell to defeat it, because raising the gas tax was the responsible, right thing to do. A year later, when Ron Sims came to us and asked for an increase in our regressive sales tax to fund expanded bus service countywide, we Seattle progressives voted for that too. And even when you insisted on tying a roads package to our light rail package, forcing us to vote for highway expansion we didn’t want, we continued to be our usual pragmatic selves, recognizing that some of these roads projects were structurally necessary, while others were politically necessary, and that in the end, the pros outweighed the cons. And then you fucked us.

We gave you your gas tax. We gave Ron his buses. But you refused to give us our light rail. And you did so believing that despite being dicked over on the one thing we really wanted, we would remain good progressives, pragmatically voting to tax ourselves for good infrastructure projects, whenever they came our way. Well fuck that.

Yes, our transportation needs are great, and in some cases desperate, and I’m sure you’re counting on that reality to incrementally achieve everything you want, piece by piece, outside of a mega-package, all the while denying us the one thing that can’t be built incrementally: rail. For example, 520 is just too important to this region, so push comes to shove, Seattle voters just wouldn’t reject funding a new bridge, right? Don’t be so sure.

See, I’m tired of being reasonable. I’m tired of being sensible. I’m tired of being pragmatic, only to have amoral fuckers like you use my pragmatism against me. As far as I’m concerned, the 520 bridge can sink into the fucking lake, I don’t drive it more than three or four times a year anyway. Traffic on I-405? That’s Kemper Freeman Jr.’s problem, not mine. The Viaduct? Screw the Port, screw DOT, screw the state… just tear the fucker down and be done with it. I live in South Seattle. I’ve got my light rail. Everybody else can fend for themselves.

Really.

You opposed Prop 1 because you figured you’d get most of the roads stuff anyway, if incrementally, but hell if I’m going to reward you for your cynicism. I-5’s Ship Canal Bridge could collapse in an earthquake, and I will fight against any tax or fee increase to replace it, unless… we get light rail expansion with it. So here’s the deal: first, you give us rail, and then we’ll give you some roads money, because we clearly can’t trust you the other way around. And if that’s not good enough for you then have fun watching your precious gasoline excise tax revenues eaten away by inflation and declining per capita consumption, because you can’t pass another increase without us.

Sure, it’s just little old me talking right now, but while most Seattleites are too polite to swear like me, and perhaps aren’t quite as spiteful either, I honestly believe you’ve underestimated the depth of opposition you’ve generated through your cynical maneuvering. In relying on the absolutist “no new roads” meme enunciated by your allies at the Sierra Club and The Stranger, you may very well have laid the seeds of your own destruction. That’s a meme I intend to seize upon without compassion or remorse, consequences be damned.

We had the opportunity to work together on a regional transportation solution, but instead you chose to fuck us. Prepare to be fucked back.

Love,
Goldy

One initiative is born. Another initiative dies. Just days after voters approve Tim Eyman’s blatantly unconstitutional and laughably unworkable I-960, the state Supreme Court throws out Timmy’s laughably unconstitutional and blatantly unworkable I-747. It’s the Tim Eyman version of the “circle of life.”

“A voter reading the text of the initiative could believe that he or she was voting to reduce the property tax limit by 1 percent instead of by 5 percent, a substantially different impact on the public coffers, as well as the perceived benefit to the individual voter’s purse,” the majority, led by Justice Bobbe Bridge, wrote.

To sum up the 5-4 decision, the majority ruled that I-747 technically violated the state Constitution, while the dissenters argued that yeah, sorta, but voters weren’t confused. Personally, I’m a big fan of the rule of law, so I side with the majority.

Eyman has passed six initiatives since achieving celebrity status in 1999, four of which have now been thrown out by the courts in whole or in part… with I-960 sure to make number five. And while it would be fun to tease Tim about his woeful inability to write laws that are, you know, legal — and I’d absolutely love to poke fun at the legal eagles who share credit for crafting I-747, state Attorney General Rob McKenna and state Supreme Court Justice Jim Johnson — I think I’d rather take this opportunity to post a more constructive commentary.

Eyman has arrogantly challenged the Legislature to respond to today’s court ruling, and I think they should do exactly that, by reimposing I-747, but at a more realistic limit factor on revenue growth of 4% or inflation, whichever is lower. This would allow local governments to continue to provide services at current levels without being forced to go to voters every couple years for special purpose lid lifts, while providing the kind of budgeting stability afforded the private sector. With energy and health care costs continuing to skyrocket, I-747’s 1% limit factor is simply unsustainable.

At the same time, Democrats in Olympia need to take the lead on providing targeted and meaningful property tax relief to those who need it most, without bankrupting the local governments that provide the bulk of our essential public services. I have long championed a revenue neutral Property Tax Homestead Exemption tied to median county home prices, that would partially reverse a decades long trend in which tax burden has gradually shifted from commercial property and the very wealthy to working and middle income homeowners. But the folks at the Washington State Budget & Policy Center have a better, if more complicated, proposal: a Property Tax Circuit Breaker.

Circuit breakers provide targeted, revenue neutral relief by providing a graduated tax credit that kicks in when property taxes exceed a certain percentage of household income, and unlike a homestead exemption, the credit can be made available to renters and homeowners alike. In a state that earns the dubious honor of having the most regressive tax structure in the nation, a well-designed circuit breaker would not only provide substantial relief to low- and middle-income households — say, a 15% reduction in property taxes — it would also restore a bit of fairness and equity. Lower income households would still pay a higher share of income in property taxes than wealthier households, but the size of the imbalance would be lower.

This is a smart and progressive proposal that lowers property taxes on the majority of voters while raising those on the wealthiest households by only about 2 percent. It is time for Democrats to seize control of this debate from demagogues like Eyman and the GOP leadership, by offering real leadership and real solutions. It is time to approve a property tax circuit breaker.

Weeks at a time go by without a peep from Greg Nickels on anything. Then, on the eve of his hosting a U.S. Conference of Mayors “Climate Summit”, he’s everywhere, he’s everywhere!

Down at South Lake Union, symbolically test driving a new red streetcar. “It’s kind of like back to the future,” Hizzoner said. We could forgive him the cliche if it were actually true, but not even the most publicity-whoring fatcat of Seattle yore would have built a 1.3-mile glorified amusement-park ride for the equivalent of $47.5 million inflation-adjusted dollars. Back in the day, streetcars were for transportation. They ran across town, they ran to Fremont, to Phinney Ridge.

As for the SoLa streetcar, I’d rather walk a few blocks and burn the calories. Or ride my bike and get there a lot quicker, with zero! carbon footprint!

Speaking of which…no sooner had the Mayor relinquished the photo-op wheel of the streetcar than it was off to City Hall for the big Progress Report on Climate Change. The short take: Seattle is down 8 percent in greenhouse gas emissions from 1990, putting us within the Kyoto Protocol target of 7 percent reduction by 2012, as long as we don’t blow it in the coming four-plus years. The summary of the report does not give much actual data on how the figures were arrived at, and I’m skeptical that there isn’t some book-cooking going on here. But even if we accept the summary’s conclusions, it’s just plain crass for the Mayor to time this thing so close to the national hoo-hah. After this weekend I doubt we’ll hear a peep about the Kyoto Protocol till Nickels announces his candidacy for re-election in 2009.

Meanwhile, there was Mayor Nickels again yesterday, patting himself on the back for the city’s Bicycle Master Plan, another brick in the reduced greenhouse-gas wall. On Monday, the plan goes before the City Council, and let’s hope the Council can find a way to reconcile its worthy goals with its lousy (so far) implementation, starting with the mess at Stone Way. Originally slated for full bike lanes, this crucial north-south bike commuter route was pared back to the confusing, mixed-signal “sharrow” markings after Fremont mogul Suzie Burke complained the bikes would interfere with truck traffic. As a result, cars and bikes have to criss-cross each other’s right-of-way on Stone Way, creating a certifiable death trap that helps neither side and endangers both. From Erica’s report it seems light bulbs are going on in Council chambers, albeit dimly. The good folks at Cascade Bicycle Club, who led two protest/solidarity rides around Fremont this summer, are on the case as well.

To sum up: Is an ego made of carbon, and if so, does it have a footprint? I would love to give Mayor Nickels the benefit of the doubt in all things green, because I support what he supports and believe in what he says he believes in. On the other hand, I don’t promote a mammoth parking garage in Woodland Park Zoo while talking about the need to discourage car culture in Seattle. I don’t extol greenhouse-gas reductions while pimping a waterfront tunnel, a gargantuan SR-520 Interchange and a Trojan Horse highway expansion levy (Prop 1) in the guise of rapid transit. And I don’t talk about more liveable and lively neighborhoods while seeking to cram “69,000 new jobs and 56,000 new residents” into them.

“Trends indicate that Seattle will become even denser, and that’s good news for our climate,” the report states. Hold on: It’s only good news if the density in Seattle reduces suburban sprawl, halts highway expansion, diminishes reliance on the automobile and curbs wasteful growth. So far, the tradeoffs just aren’t there, and all the mayor’s press releases and all the mayor’s men can’t put that Humpty together again.

No doubt the anti-rail folks were disappointed to read the report issued today summarizing the independent performance audit of Sound Transit… though that won’t stop them (or bumper sticker writers like Rick Anderson) from attempting to turn an overwhelmingly positive audit into a PR disaster.

Writing at the Daily Weekly (does anybody actually read the Weekly’s blogs if real bloggers like me don’t link to them?) Anderson characterizes the report as “stinging,” before cutting and pasting a list of bullet points under the headline “New Audit: ST Wasted $5 Mil“. By comparison, Mike Lindblom of the Times (bless their hearts) instantly cuts through the crap:

Though significant, that’s a fraction of the project’s overall budget of $2.4 billion, and Sound Transit maintains the losses are actually lower.

Sound Transit may have “wasted” as much as 0.2% of its budget… not exactly the “Big Dig” scenario critics keep warning about. To put that $5 million in perspective, one of the auditor’s primary recommendations is, surprise, annual performance audits — at a YOE cost of nearly $50 million over 50 years! ($500,000 per audit, 2.5% inflation.) And for some reason, Anderson fails to include in his bullet points the approximately $6.5 million the audit says Sound Transit saved during preliminary ST2 design through its “value engineering studies.” Huh.

Whatever. Here is the audit’s actual conclusion, as summarized at the top of the report:

Sound Transit has faced, and continues to face, challenges in delivering capital construction contracts for the Link Light Rail Project. Through the course of initially planning, designing, and building the system, the agency experienced delays and cost overruns.

Before 2002, the agency experienced a lack of expertise, no established practices or procedures relating to ROW acquisition, environmental, or construction management, and limited management oversight. Gaps in best practice tools and procedures created variability in early project delivery success and resulted in project cost and schedule impacts. The agency essentially started as an inefficient and ineffective organization. As a result, the initial light rail project communicated to voters in 1996 ultimately was modified. Its original length, Central Link, 19.7 miles (19 stations) at $1.7 billon (1995 dollars) with an expected completion date of 2006 became the following:

Segment (Expected Completion)	Miles	Stations	Cost
Initial Segment and Airport Link (2009)	15.6	13	$2.6 billion (Y.O.E.)
University Link (2016)	3.2	2	$1.7 billion (Y.O.E.)

However, in the last five years, Sound Transit has responded to its challenges through improvements in construction planning and management processes and implementation of “best practices.” Indications of diligent review of proposed change orders by Sound Transit Project Controls were also identified. From its inception in 1996, the agency has gradually developed management techniques and construction project controls and procedures.

Sound Transit has improved its structure to manage projects and has standardized guidelines on cost estimating, change and cost management, project management, and risk assessments. Sound Transit has also developed procedures for addressing emerging lessons learned.

Although Sound Transit has made great strides in improving its project delivery practices, opportunities exist that will contribute towards its present culture of continuous improvement.

That’s the unedited summary of the auditor’s conclusion, and it is far from the stinging rebuke Anderson makes it out to be. Of course the report highlights things Sound Transit could do better. That’s the purpose of a performance audit: to help an agency improve its performance. But rather than merely focusing on the agency’s shortcomings, the report actually documents a remarkable turnaround, in which Sound Transit overcame its early management woes to grow into a mature and well-run organization that is largely delivering projects on budget and on time. That’s also the conclusion of state Treasurer Mike Murphy, who in enthusiastically endorsing Proposition 1 yesterday, praised Sound Transit’s cost and revenue projections as conservative, while criticizing opponents’ numbers as “bogus.”

Opponents keep reaching back a decade or more to when Sound Transit, then a start-up agency, initially over-promised the Central Link light rail, but they intentionally ignore the progress that’s been made since then. Still, voters are largely getting the same 19 miles of rail first promised (though with fewer stations, and over a longer construction period,) and without raising any additional taxes. Opponents would like this election to be about Sound Transit’s management problems in the late 1990’s, but Murphy — whose condemnation of the Seattle Monorail’s financing package played a huge role in killing the project — succinctly sums up the real issue facing voters:

“Do you want something to happen or not? If you do, vote yes,” he said. “If you don’t, vote no.”

Indeed, if there is a lesson to be learned from this performance audit, and the parallel histories of both Sound Transit and the Seattle Monorail Project, it is the inherent danger of starting large transportation agencies from scratch… which ironically, is exactly what we’ll eventually be forced to do should voters reject Proposition 1. The pro-rail critics of the roads and transit package have this pie-eyed idea that we can just come back next year or the year after that with a transit-only package, but they ignore two basic realities: a) polls show that neither roads nor transit would pass on their own, and b) there’s no guarantee Sound Transit will even be allowed to bring a package before voters.

There are many in the Legislature and the pro-roads camp who are just itching for Proposition 1 to fail, so that they have an excuse to finally pass “governance reform,” implementing a multi-county, multi-modal transportation agency intended to dilute the influence of pro-rail Seattle voters, and essentially dismantle Sound Transit as an independent agency. Such a “reform,” whatever its merits, would be so disruptive, and introduce so many delays into any effort to pass and implement a project even remotely based on ST2, that Sound Transit would surely lose the bulk of the management and engineering infrastructure it has so painfully constructed over the past five years, and the expertise that goes with it. We would, in essence, be starting from scratch, ignoring yet another one of the audit’s primary conclusions:

Strong management and mature agency skills are not created overnight. It took five years from start-up to the time Sound Transit had its policies, its systems and its management practices fully in place. The Puget Sound region should be careful to preserve and nurture this knowledge base and not to assume that every new program needs a new agency to manage it.

No doubt Proposition 1 is filled with compromises, and I welcome a debate on its costs vs. benefits. But the measure’s opponents reveal themselves to be fundamentally lazy and dishonest in their persistent efforts to slander Sound Transit itself as corrupt and incompetent.

Given the timing, I had grave doubts that this performance audit would be fair and impartial, but I see nothing in this report to suggest that Sound Transit’s management is not dedicated to constantly improving its internal processes, that its ridership, revenue and cost projections should be held suspect, or that the agency itself is not positioned to deliver ST2 largely as promised. Large capital projects are inherently risky, and in that context the report concludes:

The use of the aforementioned “best practices” in conjunction with input from technical and subject matter experts and FTA oversight demonstrate that Sound Transit’s construction planning and management systems are maturing. This should be understood in the context of the complex and high risk contracts that Sound Transit is delivering, where challenges and risks will always be present. Focus, innovation, and due diligence will always be required to avoid surprises on such projects.

A “stinging performance audit”… my ass.

If you said 50 cents a day (and a buck-fifty on Sunday), you’d be wrong.

At least, that’s according to “Slim” Jim MacIsaac, who’s goofball numbers are getting front page treatment at the P-I.

This is from an email received earlier today:

Using the same methodology reported in the PI to arrive at the $160B cost figure for the joint ballot measure, the Seattle PI costs a reader $60,000.

Here’s how it works: 50-cents per day for 6 days a week, plus $1.50 for Sundays. That’s $4.50 a week, multiplied by 52 weeks a year for $234 per year. But wait – those are 2006 numbers. Using MacIsaac’s terms, you go back to what you’ve been paying since 1996 and go forward to what you’ll pay through to 2057. Using ST’s/MacIsacc’s/PI’s annual inflationary factor of 5.2%, you deflate back to 1996, inflate up to 2057, add it all together and you get $60,075.37 – the true cost of the PI to the reader. I like Joel Connelly, but he doesn’t seem like much of a bargain at that price, now does he? Curiously, the PI does not use these figures to encourage purchasing their product.

But wait again – this is the “true cost” of the PI for one reader, not all readers combined. So, to find the “true cost” of the PI to the community you have to multiply the per reader cost by their circulation figure (since a growth inflator of 5.2% was already in the per reader figure, you don’t have to apply it again to the circulation figure). Keeping in mind that my degree is in Political Science, not Mathematics, the number I get is $7,943,946,401.21, or $8 billion.

I too love Joel’s column, but at 60k, that’s one expensive paper.