Week in Review: November 15, 2024 - with Katie Wilson
Everett passes $20.24 minimum wage; Seattle debates JumpStart tax reallocation amid budget crisis; tech wages hit record high; controversy over streetcar removal proposal; King County Exec Constantine won't seek re-election; Burien City Manager criticized over PDC complaint.
On this week-in-review, Crystal Fincher and Katie Wilson discuss:
π Minimum wage increases for the win
π More Burien shenanigans
π° JumpStart raid
π² Seattle progressive revenue proposals
π SakaπStreetcar
π King County Exec race begins
π Upcoming appointments
Everett Voters Approve Higher Minimum Wage, Reject Business-Backed Alternative
In a significant victory for labor advocates, Everett voters strongly approved a grassroots minimum wage initiative while rejecting a competing business-backed measure. The successful initiative will establish a $20.24 minimum wage starting January 1st, with a phase-in period for smaller businesses and exemptions for those with fewer than 15 employees.
"This is a great result," said Katie Wilson, general secretary of the Transit Riders Union. "Voters approved the first one - the good one - and they rejected the bad one by a pretty strong margin of about 60%-40% in both cases."
The victory came despite being significantly outspent by the Washington Hospitality Association, which had sponsored the competing measure that would have allowed tips and benefits to count against the higher wage requirement.
Seattle Budget Crisis Sparks Debate Over JumpStart Tax Funds
Seattle's significant budget deficit has sparked a heated debate over the future of JumpStart tax funds, with multiple proposals threatening to reshape how the city spends this crucial revenue source. The tax, which primarily affects large companies paying high salaries, has significantly outperformed initial projections, now generating over $400 million annually - double its original estimated revenue.
The JumpStart tax, passed in 2020, was specifically designed to address long-term city crises through four main funding categories: Approximately 62% for affordable housing, 9% for the Equitable Development Initiative supporting anti-displacement projects, 9% for Green New Deal climate resilience programs, 15% for small business support, and the remainder for administrative costs..
However, facing a projected General Fund gap of over $250 million next year, both Mayor Bruce Harrell and Budget Chair Dan Strauss have proposed significant changes to the tax's structure. "The mayor transmitted a proposal that would basically remove all of the guidelines on how this revenue is spent moving forward by adding General Fund as an allowable category and taking away the percentage allocations to the different buckets," Wilson explained.
Two competing amendments have emerged from councilmembers. "Morales' proposal would put 20% of JumpStart revenue into the General Fund, 10% into a reserve fund, and then the rest would continue to go toward the long-term spending plan buckets," Wilson detailed. "Councilmember Moore's proposal, I believe, would put 45% into the General Fund, and then the rest into affordable housing - so basically tossing out climate investments, equitable development, and small business support."
The proposals come amid growing concern about oversight and accountability. "Both the mayor's proposal and the budget chair's proposal also eliminate the oversight committee, which was supposed to provide some transparency and public accountability over this revenue source," Wilson noted. "That committee has never actually convened... I think it's now clear why - they don't want oversight because they wanted to turn this tax into a slush fund."
Alternative solutions have been proposed by advocacy groups, including exploring new progressive revenue sources. "The JumpStart Stakeholders Coalition... has been calling for new progressive revenue and calling on the city to just do a temporary transfer for this next biennium and then next year get to work on figuring out a structural solution to this structural General Fund problem," Wilson said.
The final budget discussions and votes are scheduled for next Monday and Tuesday, with the outcome potentially reshaping one of Seattle's most significant progressive revenue sources and its intended investments in housing affordability, climate action, and equitable development.
Seattle Tech Workers' Earnings Hit Record High
Despite recent tech industry layoffs, Seattle tech workers' median earnings have reached a record $157,200, marking the first time any occupational category in the city has exceeded $150,000. This increase represents a $14,000 jump from 2022 estimates.
Controversy Erupts Over Proposal to Dismantle Seattle's Streetcar System
Seattle City Councilmember Rob Saka has sparked controversy with a proposal to remove the South Lake Union Streetcar and cancel plans for the long-delayed First Avenue Culture Connector Streetcar, a move that could significantly impact the city's transit connectivity plans.
The proposal would affect an existing transportation network that currently consists of two separate streetcar lines - the South Lake Union Streetcar and the First Hill Streetcar. The planned First Avenue Culture Connector would have united these lines into a more comprehensive system, particularly benefiting residents along the corridor and connecting to other transit options.
"The ridership projections connecting streetcar were through the roof," Wilson explained. "Once those two other lines were connected, it would just be much more attractive - lots of tourist use, as well as there's lots of actual housing and affordable housing along those lines, lots of services for low-income people along those lines."
While the South Lake Union route currently experiences low ridership, Wilson noted this is largely due to remote work patterns. "Amazon is now planning full return to office in January - regardless of what you think about that requirement, it will boost those ridership numbers."
The proposal has raised concerns about accessibility and the waste of existing infrastructure investment. "The streetcars are actually very good for folks with disabilities - in wheelchairs, specifically - you don't have to be secured in the same way because it's on a stable track," Wilson pointed out. The lines also serve critical community resources: "And hospitals, of course," she added.
The timing of the proposal appears particularly puzzling given recent voter support for transit initiatives. "We just saw the vote on the Transportation Levy - which very, very strong results, something like 66%," Wilson noted. "What we've seen consistently with Seattle residents and Seattle voters is just strong support for transit... I think that streetcars are probably popular, just as light rail and buses are popular."
The proposal seems to run counter to Seattle's stated goals of creating a more climate-resilient, accessible community. "It's not like there was an outcry from the community saying - We dislike this, scrap it," Crystal Fincher, host of the Hacks & Wonks podcast, observed. "If anything, people were saying - We want this connected. If there is any deficit here, it is the lack of connection to the wider regional network."
The future of the proposal remains uncertain as Councilmember Saka struggles to attract support from colleagues, but it has already sparked significant debate about the role of streetcars in Seattle's broader transit strategy and the wisdom of abandoning existing transit infrastructure investments.
Major Leadership Changes Signal New Era in King County Politics
King County Executive Dow Constantine's announcement that he will not seek re-election has set the stage for a significant leadership transition, with two prominent County Council members quickly emerging as potential successors. Constantine's departure after his current term marks the end of a lengthy tenure that began in 2009, opening the door for new leadership in one of Washington's most populous and economically significant counties.
King County Councilmember Claudia Balducci has officially announced her candidacy, while Councilmember Girmay Zahilay is strongly considering entering the race. The timing of these developments, coming immediately after the conclusion of the 2023 elections, suggests careful political calculation by all parties involved.
"I don't think that anyone who's in political circles is at all surprised by any of this - this has been something that has been coming for some time," Wilson noted. "The reason we're all hearing about it this week is that the election is over, and so it's time to start thinking about the next election."
The race is expected to expand beyond these initial contenders. "There is an expectation that at least one conservative candidate will get in the race," Fincher explained. "Republican Ann Davison, who's the current Seattle City Attorney, has been rumored to run."
Despite the likelihood of additional candidates, both Balducci and Zahilay are viewed as strong progressive contenders with established track records. "Both of them are clearly political insiders at this point, but in terms of progressives who want to get good stuff done - whether that's more transit and more affordable housing, stronger labor standards, progressive revenue - both of them, I think, have a lot of strong commitments in that direction," Wilson observed.
The executive race coincides with other significant changes in county leadership. King County Councilmember Dave Upthegrove's election as Commissioner of Public Lands will create a vacancy on the council, requiring an appointment process. Port Commissioner Hamdi Mohamed has emerged as a potential candidate for this position.
"That's a very diverse district - ethnically, racially diverse," Wilson noted regarding Upthegrove's district. "I would hope to see someone who has a lot of relationships already with all the communities in that district... someone who really has the interest of the working people of south King County at heart should take that seat."
The appointment process raises strategic questions about the type of replacement to select. "One of the questions is if it should be a caretaker that isn't interested in running for the full term or someone who would like to retain that seat, who would like to be appointed and then run to hold that seat in the election." Fincher explained.
These leadership changes come at a crucial time for King County as it grapples with challenges including transit funding, affordable housing, and potential impacts from the presidential election. "Our local and state governments are going to have to really step up in ways that are really hard to predict at this point with whatever is coming down from the other Washington," Wilson cautioned, emphasizing the importance of strong local leadership in the coming years.
Burien City Manager Under Fire for PDC Complaint
In Burien, City Manager Adolfo Bailon faced criticism for filing a Public Disclosure Commission complaint against a resident who testified in support of raising the minimum wage. The PDC quickly dismissed the complaint, noting that restrictions on campaigning at City Hall apply to city officials, not private citizens.
"This is just another example of like petty vengeance and overreach on the part of the Burien city manager - things have gotten really wild over there," Wilson observed.
About the Guest
Katie Wilson
Katie Wilson is general secretary of the Transit Riders Union.
Find Katie on Twitter/X at @WilsonKatieB and the Transit Riders Union at @SeattleTRU.
Resources
βEverett voters likely to boost minimum wage among highest in USβ by Josh Cohen from Cascade PBS
βBurien City Manager Filed Complaint Against Public Commenter; Seattle Library Hosts Another Anti-Trans Eventβ from PubliCola
βEarnings for Seattle tech workers hit record highβ by Gene Balk from The Seattle Times
βRaiding JumpStart, new capital gains tax, Capitol Hill public safety line items on table in final Seattle 2025 budget pushβ by jseattle from Capitol Hill Seattle Blog
JumpStart Defense Coalition - Press Conference - November 12, 2024 - Seattle City Hall
βSeattle councilmember proposes 2% capital gains tax to support low-income initiativesβ by Lisa Stiffler from GeekWire
βCity Council to Vote on Final Amendments to 2025-2026 Budgetβ by Hannah Krieg from The Stranger
βRob Saka Pushes to Decommission the South Lake Union Streetcarβ by Ryan Packer from The Urbanist
βDow Constantine will not seek reelection as King County executiveβ by David Gutman from The Seattle Times
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Podcast Transcript
[00:00:00] Crystal Fincher: Welcome to Hacks & Wonks. I'm Crystal Fincher, and I'm a political consultant and your host. On this show, we talk with policy wonks and political hacks to gather insight into local politics and policy in Washington state through the lens of those doing the work with behind-the-scenes perspectives on what's happening, why it's happening, and what you can do about it.
Today, we're continuing our Friday week-in-review shows where we review the news of the week with a co-host. Welcome back to the program, friend of the show and today's co-host: general secretary of the Transit Riders Union, Katie Wilson!
[00:00:46] Katie Wilson: Great to be here, Crystal.
[00:00:47] Crystal Fincher: Great to have you here. Well, we talked about a number of election results on last week's show, but we did not get to all of them. There were also a number of races that were too close to call at the time. We have some more results - one of them I wanted to talk about was the Everett minimum wage vote. What happened? What were voters choosing between? And what did they decide?
[00:01:13] Katie Wilson: Well, this is a great result. So up in Everett, a group of volunteers gathered signatures and they put a minimum wage ballot initiative on the November ballot. It was very similar to the legislation that we passed in Tukwila back in 2022, and that passed the following year in Renton. So it establishes a higher minimum wage - in Everett's case, they're going for $20.24, starting on January 1st - with a phase-in for smaller businesses and they exempt businesses up to 15 employees, which is similar to what we did in Tukwila and Renton. They also have an access-to-hours policy that requires employers to offer available hours to part-time workers before hiring new employees.
So what's interesting about this campaign is, first of all, that it was run by a group of volunteers. The threshold for signature gathering in Everett is super low, so they only had to gather like fewer than a thousand ballot signatures in a city of over 100,000 people - which is pretty amazing. They got it on the ballot. And then the Washington Hospitality Association, which has been fighting minimum wage measures, basically paid to gather signatures for a competing initiative. And I think what's interesting about this competing initiative is that they recognize that raising the minimum wage is popular. So their initiative also would have raised the minimum wage similarly, except that tips and benefits could count against the higher wage - so there was a tip and benefit penalty - and this is the same thing we've seen the Washington Hospitality Association pushing for in Seattle earlier this year. So there were two measures on the ballot - the business measure was a better funded campaign. But guess what? Voters approved the first one - the good one - and they rejected the bad one by a pretty strong margin of about 60%-40% in both cases. So I just think this is a fantastic result - I was really worried about this election because I thought that with more money behind the campaign, voters were going to be confused. But I think it really shows that voters - when people leave a tip at a restaurant, they want that tip to go to the worker, not the boss.
[00:03:19] Crystal Fincher: Absolutely. I was also concerned about this initiative because they were dramatically outspent - really a grassroots effort versus a deep-pocketed corporate opponent who was just kind of spending freely, really blanketing the city with messaging in multiple modes. But residents saw through it. And this seems to be a trend - with different cities passing minimum wage legislation. This seems to be just something on the top of voters' minds - things that they are very passionate about. And even the efforts to water them down or to oppose them in various cities have failed. What do you think this says about the minimum wage movement? And what is the prognosis moving forward for other cities in the state?
[00:04:09] Katie Wilson: Well, and I think even beyond Washington state - something we saw in the election last week is that even voters in states that went for Trump also sometimes approved minimum wage laws. So this is an issue that I think is just popular across the board - it's not even just a Democrat issue. And we have coming up in Burien next February, a ballot initiative to raise the minimum wage to match other cities in our county. And the Everett result really gives me hope for that because the Burien City Council earlier this year - a majority of the council, I want to say, not all the councilmembers, still a few good ones on there. But a majority of the council passed a minimum wage law - basically like the Washington Hospitality Association's initiative in Everett - to confuse people, that pretends to raise the minimum wage but doesn't really do it and includes a tip and benefits penalty and has a lot of other problems that I won't go into because they're kind of wonky. But we're going to be trying to get out the vote for Burien in February and trying to make sure that people understand that the law that the council passed is not good enough. So the Everett result certainly gives me hope there. And then we've also heard that Tacoma and Olympia folks are thinking about doing minimum wage and labor standards initiatives there next year, so this really is a movement that is spreading to cities around the state, which is just, I think, really fantastic for workers in this high cost of living environment.
[00:05:33] Crystal Fincher: Absolutely, really fantastic. And I think a lesson that people can take following the results, certainly of the national election - which is not the preference of certainly me and probably most of the people who listen to this program - but policies that help people remain popular. You can take the label off of the policy - doesn't matter whether you label it progressive or not. These are policies that materially help people, help families, and really address the most pressing concerns that people have today. So this certainly seems like it's part of the blueprint moving forward, which is to, on all fronts, advance policies that help improve the lives of regular everyday people on the ground - certainly minimum wage does that.
Now there's one thing I want to talk about, interestingly - since you talk about Burien and the vote coming up in February - Burien City Manager, as well as that council majority, have made news for over a year now for various calamities and shenanigans. And we have another one here. The Burien City Manager submitted a complaint to the PDC about a regular Burien resident testifying in support of raising the minimum wage in Burien. What happened with this?
[00:07:02] Katie Wilson: Yeah, Adolfo - oh Adolfo. So what happened is that a Burien resident who's involved in our campaign and who also happens to work for the Washington Community Action Network, which has been very active in helping us to gather signatures, testified at a council meeting - basically telling the council that they should just pass our legislation and expressing her belief that Burien voters strongly support a minimum wage. And she was told to stop talking because her words were campaigning for an initiative - which I think is very debatable. But in any case, what happened next is that the city manager filed a complaint with the PDC against her as a citizen commenter for campaigning at City Hall. The PDC very quickly issued a letter saying - This is ridiculous. I mean, they didn't use those words, but basically - the law prohibits city officials from campaigning for or against ballot initiatives, and it does not say anything about private citizens. And it's really the responsibility of whoever's running the meeting - in this case, the mayor of Burien - to prevent citizens from campaigning in City Hall. So if anyone has committed an infraction, it's actually the Burien mayor, not the private citizen who's testifying. So this is just, I think, another example of like petty vengeance and overreach on the part of the Burien city manager - things have gotten really wild over there.
[00:08:31] Crystal Fincher: Things have gotten absolutely wild over there and have remained wild over there. I was reading that yesterday and one, just thought it was really ironic that City Manager Adolfo Bailon may have implicated Burien Mayor Kevin Schilling in actual substantive grounds for a complaint in his attempt to trap a citizen for testifying. But it really is troubling and could certainly chill and intimidate residents from going to testify in support of things that impact their lives. It just is really a hostile use of government - in wielding your power like a weapon to go after a resident like that, who is simply doing what they have a right to do. And because they don't agree - filing this complaint from the city manager, who has made news for spending lots of time not doing his job and calling the police on unhoused people almost daily to file complaints. Nothing substantiated, no arrests resulting from that. So it seems like he's doing everything but his own job. Really hope to see that change in Burien, but it may have to be the residents forcing that with both this vote and their action moving forward - because just absolutely ridiculous, uncalled for, and just a hostile use of their power.
[00:10:01] Katie Wilson: Well, and just to add one more thing along those lines - the shenanigans related to this Burien minimum wage campaign go even deeper. The city sent out postcards to every resident, as far as we can tell, announcing that they've raised the minimum wage to the highest in the country. This is clearly an attempt to prevent our measure from succeeding. But it's just a lie - the postcard mentions nothing about the tip or benefits penalty, or the way also that they've defined their high-level minimum wage, which means that almost no one will get it because it's restricted to businesses with over 500 full-time employees in King County. So even multinational corporations might not qualify if they have only a few locations here. So they're basically just misinforming people about what the bill that the council passed actually does. So that's actually another example of a probably substantive complaint that we could make - that the city is effectively campaigning against our measure by misinforming their constituents about what the council law actually does.
[00:11:02] Crystal Fincher: Absolutely. I do want to talk about some other wage-related news this week - and that was regarding Seattle tech workers' earnings reaching a record high, which was surprising to some people because they were looking around and saying - Oh, you know, thought there had been a bunch of layoffs, maybe a correction in that market. But it seems like that did not impact wages. What was reported on? What was found here?
[00:11:29] Katie Wilson: Yeah, I believe that this was Gene Balk over at The Seattle Times. And I believe the finding was that the median tech worker salary is over $150,000 at this point. So, yeah - very high. And that also means that the companies that employ those tech workers are going to be paying more in JumpStart tax over to the city.
[00:11:51] Crystal Fincher: Absolutely. This is the first time median earnings for Seattle workers in any occupational category has passed the $150,000 mark. It's up to $157,200, up $14,000 from the 2022 estimate. So certainly healthy - more than healthy - growth there. And amidst some of the uncertainty, that's certainly comforting for people who work there. But also sparking conversations about the cost of living. And as you just talked about - the Seattle City Council, the City are currently in the process of figuring out what the budget is going to be moving forward as they deal with a very large deficit that actions of the council and mayor have made much larger this year. And one of the ways they're trying to mitigate that deficit and plug the hole is by diverting JumpStart funds. I wanted to start off, and wondering if you can explain - What do JumpStart funds cover? What is JumpStart? And what does it do for the city?
[00:12:58] Katie Wilson: Sure. So the JumpStart payroll expense tax was passed in 2020. And that was kind of the culmination of a multi-year campaign that many, many people and organizations had been involved in to try to tax big business in Seattle. And that tax was passed in those first months of the pandemic. And what it does is it taxes businesses on the basis of payroll that they pay to high-paid employees. Originally, this was employees who make over $150,000 a year - that number has been going up with inflation, so I believe it's something like $187,000. So basically, it's really targeting the tech industry and some other high-paid industries - and it's the business that pays, not the worker. There's also different rates for different sizes of businesses - so you can imagine Amazon, which is both a very large business in Seattle with a lot of high-paid employees, is paying a lot of tax. The original projections for the tax were that it would raise a little bit over $200 million a year. At this point, it's overperformed, and it's projected to raise well over $400 million a year going into this next biennium. It was passed during COVID, and so the original idea of how the money would be spent was that a big chunk of it - and actually, all of the first year's collected revenue - were going to go toward COVID-related city expenses. After that, what was supposed to happen is that money was supposed to be divided between four different buckets. And the long-term spending plan was really designed to address long-term crises and needs that our city faces and that have been really under-invested in for decades. The affordable housing crisis is the biggest bucket - about 62% of the revenue was supposed to go toward that. The Equitable Development Initiative, which supports community-driven development projects to prevent displacement - especially in immigrant communities, communities of color - was supposed to get 9% of the revenue moving forward. Green New Deal climate resilience programs, another 9%. And then small business support and economic resilience was a fourth bucket at, I believe, 15%. And then there's 5% for administrative costs.
So that was the long-term spending plan. It's never been adhered to exactly because after that first year, there was still COVID-related needs and beginnings of this yawning gap in the General Fund. And so there have been one-time transfers from the JumpStart tax to the General Fund in the subsequent years leading up to this budget cycle. So what's happened now in the budget discussion, now that we're looking at actually quite an enormous General Fund gap moving forward of - I don't even know what the latest numbers are, but somewhere in the like high $200 million a year - the mayor transmitted a proposal that would basically remove all of the guidelines on how this revenue is spent moving forward by adding General Fund as an allowable category and taking away the percentage allocations to the different buckets. And what's happened this week is that Budget Chair Dan Strauss has announced his own proposal, which is, I would say, marginally better than the mayor's. So there's still no firm commitment to continue spending in the areas of affordable housing, equitable development, etc. It does retain the percentages for those four buckets, but only as a guideline. And it basically says that money going into the General Fund should be kind of limited to what's needed, but it's very vague. So again, there's nothing binding about this. Both the mayor's proposal and the budget chair's proposal also eliminate the oversight committee, which was supposed to be created to provide some transparency and public accountability over this revenue source. That committee has never actually convened. The council made its appointments - I'm actually one of the people who was supposed to be on that committee - but the mayor's office has not made his appointments or taken any steps to convene the committee. I think it's now clear why - they don't want oversight because they wanted to turn this tax into a slush fund. So that's kind of where we're at.
And the other thing that's happened this week is that there are now two proposals - one from Councilmember Morales and one from Councilmember Cathy Moore - to basically amend the budget chair's proposal. Morales' proposal would put 20% of JumpStart revenue into the General Fund, 10% into a reserve fund, and then the rest would continue to go toward the long-term spending plan buckets. Councilmember Moore's proposal, I believe, would put 45% into the General Fund, and then the rest into affordable housing - so basically tossing out climate investments, equitable development, and small business support. Sorry - that was a lot of technical stuff, but those are the proposals on the table at this point, and I believe it's next Monday and Tuesday, with the final discussions on the budget, that the council will be discussing and voting on those.
[00:17:49] Crystal Fincher: I really appreciate going into detail on this. I mean, what other show should we do that than on a show called Hacks & Wonks? But it really is central to the budget discussion that we're having now and the priorities of the city, as identified, moving forward. We are having this in the context of an affordable housing crisis - that everyone seems to agree on. It's the action to combat the high prices of rent and housing that is a little bit trickier with the folks on the council. Also, folks on the council - a number of them ran and won after saying that they were very concerned about displacement when we're dealing with housing, very concerned about making sure people aren't priced out, forced out of their homes and neighborhoods, particularly a number of communities of color, economically disadvantaged communities, and saying that that was a real concern. So then seeing them turn around and try to essentially wipe out all of the equitable development funds, which were designed, really, in partnership with community and really fund community-based proposals that are effective on the ground, led by community, really important - are out the window. And this is not the first time that they have sought to divert or lessen those funds. And not the first time that they have seemed to target funds that address displacement, particularly among communities of color in Seattle - and it has been troubling to a lot of people. And then as we move forward, the climate funds, the climate mitigation funds - we have a lot to do, especially now that the federal government is likely to step back its effort, repeal many efforts to reduce greenhouse gas emissions, reduce pollution. So it's so much more important for cities and states to take action. And the majority of the council seems to be okay with tossing that out of the window. It really seems like residents are not aligned with that. It seems like the results of the citywide election for the council seat that Tanya Woo was appointed to, that was just won by Alexis Mercedes Rinck, certainly articulated a lot that was in opposition to this proposal and what we're hearing in this budget cycle from the council majority. Where do you think Seattle residents are on this? And what can they do in the time remaining to help make their voices heard?
[00:20:27] Katie Wilson: Well, there's not a lot of time remaining in this budget cycle. I think the thing that people can do - probably the most realistic thing - would be to push for the amendment that Councilmember Morales put forward that continues to devote the bulk of the funding to those intended long-term spend plan priorities. So you can call council offices, you can send them emails, tell them to support Councilmember Morales' JumpStart amendment. So that would be the immediate thing.
I think what's really at issue here is how to fill the budget gap. So if they don't take all of this money from JumpStart for the General Fund, then they're left with a big hole that needs to be filled - and how do you fill it? The JumpStart Stakeholders Coalition that the Transit Riders Union and a lot of other organizations have been part of during this budget season has been calling for new progressive revenue and calling on the city to just do a temporary transfer for this next biennium and then next year get to work on figuring out a structural solution to this structural General Fund problem. There could be a number of pieces of that - it's basically, how do you get new revenue? One of the reasons why we're in this problem is that there's the state law that restricts property tax from growing by more than 1% a year. So anytime you have an inflationary environment, or even just inflation more than 1%, then you're going to have a gap between expenditures and revenues that opens up. So getting the State Legislature to finally do something about that could be part of the solution. There's probably other things the Legislature could also do to give Seattle more revenue tools.
And then there are just progressive revenue options that the city already has the authority, or arguably has the authority, to do. We know the capital gains tax is one of those, and we saw a proposal from Councilmember Moore to do a local capital gains tax - she's proposing a 2% on top of the state 7% capital gains tax. So that is one option. Of course, she's also attached some spending ideas to that - it's hard to resist, when proposing new revenue, to also propose new spending things, even when there is a big budget hole, because people love to propose new spending. So that's one option. And I know that Councilmember Tammy Morales also has a couple of new progressive revenue ideas that are in the works - a professional services excise tax and a digital ad tax. I think both of these are great ideas - they're both very interesting ideas, too. To go a little bit into detail, the professional services excise tax - the background of that is that our state and local sales tax actually excludes professional services. So if you hire a plumber to fix your pipes, you are paying sales tax on that. If you hire an architect to design your house, you are not paying sales tax on that. So there's this whole category of high-priced services that are not being taxed by our 10%+ sales tax. So the idea of doing a local excise tax on those professional services - and I believe that Morales'proposal is 1%, so it's actually a very tiny percentage - I think is a really interesting idea. And then the other one - digital ad tax - is something that there's more and more interest in these days. Just looking at the way that the big internet platforms have soaked up ad revenue that used to go to news outlets. Also, just obviously all of the adverse impacts of social media and the way that advertising on social media has bad social consequences for people's mental health, etc. So there's a lot of reasons to tax online advertising. And I don't know all the details of Morales' proposal - I heard the number 5% floating around, but I don't think we've seen the details of these yet. So new progressive taxes like these are another way that the city could choose to approach its budget gap - not saying that I think that they can easily raise $250 or $300 million a year with these things. But what I would hope is that they have this conversation, they do the research, they figure out what they can do with new progressive revenue - and then we can have an actual conversation about whether it's necessary to dip into JumpStart at all, or what the other parts of the solution might be to this structural deficit. But rushing to just totally dismantle the commitment that was made to Seattle residents and communities about how this revenue would be spent is just the wrong approach.
[00:24:41] Crystal Fincher: Absolutely. Well, we will certainly continue to follow those proposals as they are released and what results with those proposals and with the budget. Also, want to talk about Councilmember Rob Saka - never a boring moment associated with Councilmember Rob Saka - and his proposal for the Streetcar. What is he proposing?
[00:25:08] Katie Wilson: Saka is clearly not a Streetcar fan - let's just put that out there. He's proposing to remove the South Lake Union Streetcar, and then just to cancel plans to build a long-delayed First Ave City Connector Streetcar.
[00:25:22] Crystal Fincher: Which is a challenge, because this was seen as hopefully - in the future - connecting to a larger network. What would that mean for potential connectivity - with the Streetcar and Rail - for the future in Seattle?
[00:25:39] Katie Wilson: Currently, we have the South Lake Union Streetcar and then the First Hill Streetcar. And so the First Ave Streetcar - Culture City Connector Streetcar - would have connected those two. Streetcars, I will say, within Transit Riders Union membership and the transportation activist advocate community more broadly, are a little bit controversial. There are some people who think that they're fake trends that are more about property values and development than actual transportation. But there are places in the world that do street cars great - high ridership. And the ridership projections connecting Streetcar were through the roof. Now, of course, they're just projections. But I think the idea was that once those two other lines were connected, it would just be much more attractive - lots of tourist use, as well as there's lots of actual housing and affordable housing along those lines, lots of services for low-income people along those lines. And so the idea was that once you have them connected, the ridership on all of the lines will go way up. And then of course, they connect to our bus system, our light rail system, etc. I think the South Lake Union route in particular has very low ridership today, but that's also because of all the work from home. Amazon is now planning full return to office in January - regardless of what you think about that requirement, it will boost those ridership numbers. And so we've invested a lot in this infrastructure. Another point that folks in the Transit Riders Union have made is that the streetcars are actually very good for folks with disabilities - in wheelchairs, specifically - you don't have to be secured in the same way because it's on a stable track. So there's some good reasons for keeping the streetcars - and getting some return on this big infrastructure investment that the city's already made. So yeah, we don't think that Saka's plan is the right one - I guess, is the upshot there.
[00:27:26] Crystal Fincher: Yeah. And odd, it's not like there was an outcry from the community saying - We dislike this, scrap it. It seems like, if anything, people were saying - We want this connected. If there is any deficit here, it is the lack of connection to the wider regional network. And as you say, it is an easier option for people in wheelchairs, it's adjacent to senior housing. As you said, adjacent to a lot of services for people - so it's there and people use it.
[00:27:59] Katie Wilson: And hospitals, of course.
[00:28:00] Crystal Fincher: Yes, absolutely. And so to see that kind of investment seemingly just scrapped seems really wasteful and unfortunate. And not taking advantage of the infrastructure that we have to build a more climate resilient, walk-and-roll friendly community that most of Seattle seems to continually vote for and say that they prefer.
[00:28:29] Katie Wilson: Absolutely. We just saw the vote on the Transportation Levy - which very, very strong results, something like 66%. And I think that what we've seen consistently with Seattle residents and Seattle voters is just strong support for transit. Now, obviously, the Streetcar was not part of the Transportation Levy, but I think most voters aren't really going at that level of detail. They're just saying - Transit, yes. More transit, yes. So I don't know that anyone's done polling or anything, but I think that streetcars are probably popular, just as light rail and buses are popular.
[00:29:00] Crystal Fincher: Agree. So we will continue to follow that proposal and what Seattle City Councilmember and chair of the Seattle City Council Transportation Committee, Rob Saka, does with that. We also got news this week that Dow Constantine, King County Executive, is not running for re-election and that Claudia Balducci is running for that seat and Councilmember Girmay Zahilay is strongly considering a run for that seat. What led up to this? And what do you think is going to happen? Or how do you view Councilmember Balducci and Councilmember Zahilay throwing their hats into the ring?
[00:29:48] Katie Wilson: Well, I don't think that anyone who's in political circles is at all surprised by any of this - this has been something that has been coming for some time. And the reason we're all hearing about it this week is that the election is over, and so it's time to start thinking about the next election. So yeah, I think Constantine has been planning to retire, and Balducci and Zahilay have been planning to run for some time now. I guess my overall feeling is we're really lucky to have these two be seemingly the top contenders for this position - just thinking about, by comparison, the way that Seattle mayor races have gone in recent cycles and the kind of candidates we've had on offer there. Both of them are clearly political insiders at this point, but in terms of progressives who want to get good stuff done - whether that's more transit and more affordable housing, stronger labor standards, progressive revenue - both of them, I think, have a lot of strong commitments in that direction. So I think that in general, people should just be really happy that this is our choice. I'll tell you that I think the Transit Riders Union is going to have a really, really hard time choosing between them if they end up being the two candidates. I don't want to rule out that there could be some third person who steps up and is suddenly a viable candidate, but these two have certainly been planning for some time.
[00:31:06] Crystal Fincher: They definitely have been planning for some time. There is an expectation that there will be a conservative candidate - at least one conservative candidate - who gets in the race. The name Republican Ann Davison, who's the current Seattle City Attorney - her name has been in some of those conversations. That would be interesting, and we'd have to see how that results, or whatever conservative or Republican gets into the race. So I'm sure these aren't the last names that we'll hear from in relation to this race, but it is hard not to view Claudia Balducci and Girmay Zahilay as the front-runners at this point in time. So it'll be very interesting to follow that.
And also, now that we're done with the 2024 elections - largely done, still a few races that are too close to call yet that we should be hearing conclusive results from in the coming days - but there will also be an appointment coming up to replace Dave Upthegrove, who was just elected to be the Commissioner of Public Lands as a statewide office, replacing his position on the King County Council. Have you heard anyone in contention for that, or is there anything that you're looking at that you feel is necessary for a candidate in that seat?
[00:32:24] Katie Wilson: Well, the one name I've heard is Hamdi Mohamed, the port commissioner - and she'd probably make a great councilmember. That's a very diverse district - ethnically, racially diverse. I would hope to see someone who has a lot of relationships already with all the communities in that district. I would hope to see someone who supports raising the minimum wage - we've been doing a lot of work in south King County on that issue - and also on renter protections. I think just someone who really has the interest of the working people of south King County at heart should take that seat.
[00:32:54] Crystal Fincher: I would agree with that - I think that makes a lot of sense. I think one of the questions that will be facing the executive, who will make this appointment, will be - should it be a caretaker that isn't interested in running for the full term, for running for election and just someone who's there before the election takes place? Or should it be someone who would like to retain that seat, who would like to be appointed and then run to hold that seat in election? So I think that is one of the primary decisions that will need to be made, and then we'll see which candidates result from that. But I think we're going to hear a lot of names in relation to that - certainly Hamdi Mohamed, as someone who would be interested in holding that seat for the long term, is a name near the top of many people's lists. So we'll see how that turns out.
And also, we have the 33rd Legislative District appointment coming up after Karen Keiser retires from her Senate seat there. And to me, a lot of the concerns, or things that you were looking for, in that King County Council district seat also hold true for that 33rd Legislative District seat. Is there anything else that you think is a priority and important there?
[00:34:12] Katie Wilson: I think all those same things. I think in the Legislature in the coming year, there's going to be another big push for rent stabilization and probably a lot more talk, since there is a state budget deficit as well, about revenue and progressive revenue. So I would certainly hope to see someone who has good positions on those things and is going to fight for them. Thinking about public transit too, there's also this issue coming up - King County Metro's long-term financial outlook is a little bit grim - and thinking about how we can really get transit investment countywide. So 2026 is when the Seattle Transportation Benefit District is due for renewal again. And if you remember all the way back to 2014, that measure was actually run in Seattle because a larger King County measure failed. And I think it's really important to think about how can we be expanding bus service, transit service countywide, especially as more light rail stations are opening. And it would be nice if the State Legislature would do some thinking about that and give King County some more tools for how to fund bus service, because right now just going out with a sales tax measure or a car tab measure feels dangerous - regressive taxes that people around the county are not going to be particularly excited about. So I think the State Legislature has a role to play in thinking about how we can get some more local options. Also just direct state funding for transit operations would be great. So yeah, someone who's really thinking how they can bring home the basic services and the revenue to King County.
[00:35:43] Crystal Fincher: Yeah, I completely agree with that. The 33rd District is Kent, Des Moines, Burien, Normandy Park, Tukwila, and SeaTac - that area. A couple of additional things, in addition to the list that you had, that I personally am certainly looking for as someone in the 33rd is how they plan to address education funding. Districts in the 33rd, like the Kent and Auburn school districts. are facing the same kind of challenges that we see in Seattle and elsewhere across the state, where they're seriously underfunded and trying to make up for that with local levies and bonds that aren't always successful. And so they're in quite a bind, and so many of our districts are. So certainly progressive revenue is going to play a role in addressing that gap in deficit, as well as potentially some of the loss of federal funding that our state and region is looking at. And then also, as light rail is being extended further south with the Kent-Des Moines stop and then heading down to the Federal Way stop, would certainly like to see land use around those light rail areas addressed. They can have a lot more density, a lot more services - particularly in the corridors that those are in. And I think it's really important for the region to have a unified leadership talking about how important that is and working with partners in the cities and the district to ensure that gets done. And so those are additionally very important things that I will be looking to see. We'll certainly be hearing a lot more about that in the coming weeks, and we'll continue to follow the developments in those appointments and races to come.
[00:37:35] Katie Wilson: Well, I think we would also be remiss not to mention the challenges that are going to come with the Trump presidency, too. I think that our local and state governments are going to have to really step up in ways that are really hard to predict at this point with whatever is coming down from the other Washington and be prepared to defend people and programs and all the things that will be under threat in the next four years.
[00:38:00] Crystal Fincher: I completely agree. And with that, we thank you for listening to Hacks & Wonks on this Friday, November 15th, 2024. The producer of Hacks & Wonks is Shannon Cheng. Our insightful co-host today was general secretary of the Transit Riders Union, Katie Wilson. You can find Katie on Twitter at @WilsonKatieB. You can find the Transit Riders Union on Twitter at @SeattleTRU. You can follow Hacks & Wonks on BlueSky at @HacksAndWonks and find me on BlueSky at @finchfrii. You can catch Hacks & Wonks on Apple Podcasts, Spotify, or wherever else you get your podcasts - just type "Hacks and Wonks" into the search bar. Be sure to subscribe to the podcast to get the full versions of our Friday week-in-review shows and our Tuesday topical show delivered to your podcast feed. And please leave a review wherever you listen. You can also get a full transcript of this episode and links to the resources referenced in the show at OfficialHacksAndWonks.com and in the episode notes.
Thank you for tuning in - talk to you next time.