This post originally appeared on Orphan Road.
Erica Barnett notes (via STB) that East King County (a.k.a. Bellevue and environs) will be hit hardest by Sound Transit’s revenue shortfall:
And East King County, which includes East Link to Bellevue and Redmond, stands to lose an additional $223 million, making a planned $300 million tunnel through downtown Bellevue, supported by many residents and the Bellevue City Council, look less likely than ever.
When Sound Transit was initially conceived, it was set up so that one sub-area couldn’t subsidize another sub-area. Â Local leaders feared (with some merit) that all the tax money would get sucked into an expensive. Seattle-only rail system and the ‘burbs would be left with nothing.
Irony of ironies, here we are in 2010, Seattle has a decent light rail line already open, another section (U-Link) under construction, and a third segment (North Link) funded and in the planning stages. Â If it weren’t for sub-area equity, which folks in East King supported, North King’s tax receipts (which weren’t hit as badly*) would have gone to subsidize East Link, and the whole system would have had to bear the brunt of the diminished revenue equally (possibly with shorter segments or longer timelines all around).
So the very same sub-area equity that was supposed to protect East and South King is going to end up costing them. It’s like rain on your wedding day, kids.  Or, more accurately, it’s a free ride, when you’ve already paid.
*Anyone have a theory as to why N. King weathered the storm better? Â I have my thoughts — I think it’s related to the regressiveness of the sales tax and how it hits rich and poor unequally — but I’d love to hear more (informed) opinions.
(hat tip reader e)
Interesting. I’m having trouble wrapping my head around a possible source for this difference. Maybe there’s more shopping that’s done outside the city? That is where most of the malls are. (warning, large assumptions ahead) Perhaps people in the North King area live more densely and therefore have less room for stuff and therefore consume less stuff and therefore have less of a decrease in spending when hard times hit (because what’s left when you remove spending on “stuff”? necessities). All wild speculation, of course.
I’m curious about where the bulk of our sales tax money comes from – items like large appliances? restaurants? clothes? I think knowing this might bring us closer to understanding this issue.
Probably a gross oversimplification but could it simply be that Seattle was hit less hard than it’s suburbs for the same reason that Seattle grew at a higher percentage than the King county as a whole: that the Titanic is slowly turning away from the iceberg? That cities are slowly, SLOWLY becoming more populous and economically vibrant and the suburbs are slowly withering. I believe I read somewhere that nationally vacancy rates were significantly higher in the suburbs than in the city core.
If so I have only one thing to say:
Quick search turned up this about Portland:
http://portland.bizjournals.com/portland/stories/2010/07/12/daily44.html
Still looking for stats on Seattle.
Yes, need more data. I also wonder how much of the 2nd-mortgage-fueled spending will never come back. My guess is that there were more 2nd mortgages outside Seattle simply because there is more owner-occupied housing outside Seattle.
Everything I’ve been about to find was talking about 00-09. Couldn’t find any stats more recent, or even just covering from the recession on.
Well, bearing in mind that Erica was discussing the anticipated monetary shortfalls of providing planned services, I would guess that you lose more money faster when you run buses in the suburbs than you do when you run buses in the city.
“*Anyone have a theory as to why N. King weathered the storm better? ”
A couple. Median income is higher on the eastside and luxury items are easier to cut back on. Even if someone making a good salary consumer confidence is low. It’s easier to postpone a big new HDTV than buying new shoes. I think that’s what you were hinting at by “the regressiveness of the sales tax.”
DT used to be the retail center of the region. That’s no longer true. Someone buying a big screen TV, IKEA furniture, etc. is likely to visit Renton or South Center or Lynwood rather than shop DT. Of course staples like toothpaste and toilet paper will continue to be bought close to home.
It was postulated over on STB that the larger percentage of govenment jobs in the West Sub-area helped cushion the down turn. I’d add union jobs to that as well. Very few non-union workers are getting automatic cost of living adjustments negotiated years ago in long term contracts.
The Seattle jobs that were lost, like in banking for example, likely had a large number of employees that actually commuted in from the suburbs. So while the vacancy rate in DT Seattle remains higher than say Bellevue the effect of those lost jobs may actually be felt harder on the eastside. OTOH, the demographic that tends toward wanting to live in the city but is employeed by a tech company on the eastside will continue to spend their entertainment dollars in Seattle
@Bernie, yes, that’s what I was hinting at. The retail argument makes sense. While Seattle does have a few big box stores within the city proper, you’re right that most of that high-end shopping is done out of the city. Cars, too. Cars are a huge expense that people go outside of the city for, and car sales are down substantially since the recession began.