Yesterday the Seattle City Council* voted unanimously (Tim Burgess was absent) to send a $60 vehicle license fee and 0.1% sales tax increase to the November ballot to save bus service. The measure would mostly maintain the service level in the City of Seattle and preserve some trips to and from the suburbs. The final approved version is here. Public comment at the hearing was unanimously in favor of preserving bus service. There were also several amendments.
The first change from the Mayor’s proposal is that both taxes expire at the end of 2020, rather than in 10 years.
Nick Licata made a point of verifying that any surplus after restoring service levels could not be used for, as he put it, “more capital-intensive fixed rail projects” because the legislation specifically authorizes “Metro transit bus service hours.” Of course, this language would also seemingly prohibit various sensible bus capital improvements, like transit signal priority, bus lanes, trolley wire, off-board payment, and so forth, using TBD funds.
Mike O’Brien sponsored a (unanimously) successful amendment to set aside up to $2m for increasing “access to the low-income fare program” and “developing and potentially funding additional no-income and low-income products for Seattle residents.”
Tom Rasmussen earned unanimous approval of an amendment he said was inspired by the League of Women Voters, that “clarifies” that “the first priority for the funding is to preserve existing routes and prevent Metro’s proposed service cuts and restructures,” and demands the public process that is typical in Metro restructures anyway. The LWV, represented yesterday by occasional STB commenter Joanna Cullen, has been a reactionary force against restructures that would boost Metro ridership by rationalizing the route network, specifically to Route 2. Multiple sources assure me that this language does not prevent sensible, ridership-driven restructures after the usual public process. It’s perhaps inevitable that introducing city funding also introduces another veto point for restructures. But I would have been happier if the amendment didn’t pass.
The most interesting part of the afternoon was the argument over the sales tax. Councilmembers Licata and Sawant floated a plan to replace the relatively regressive sales tax portion with an employee head tax and commercial parking tax to generate about the same amount of revenue. They convinced no one to cross over and lost 6-2. I am relatively relaxed about regressive taxation for transit, as the spending itself is quite progressive. But the arguments yesterday are interesting.
One argument was that the sales tax was part of the package that Seattle voters already supported in April, and therefore the safe choice. Josh Feit in PubliCola:
Speaking for the majority, Council Member Tom Rasmussen (along with Sally Clark) said it was safest to go with the sales tax version because Seattle voters already said yes to the fix in April when Seattle voters overwhelmingly supported Prop. 1 (66.5 percent) as King County at large defeated it.
The Council can approve the head tax and parking tax without a public vote, so the electorate isn’t directly relevant.
Ansel Herz in The Stranger covered some other arguments:
In response, Sally Clark and Jean Godden [argued] that they would hurt small businesses and that the commercial parking tax is regressive because it falls on all people, regardless of income, who drive cars.
Licata, who usually cuts a demure figure, had to laugh at that. “I should point out that if we use this logic, that the admission tax or the nickel fee for using paper bags are likewise as regressive because they treat all people the same regardless of their income,” he said, adding that he was “amused” by the argument.
“They all share one thing in common,” Licata said. “They charge for an activity that is voluntary, unlike sales tax, which must be paid by everyone participating in our economy.”
It is curious to object to taxing payrolls at less than 1 cent per hour in the aftermath of a $5-plus-per-hour increase in the minimum wage. It’s not at all clear to me that a sales tax is better for small business than a head tax, especially given small business exemptions, to say nothing of its impact on poor people. But both small and large businesses dislike the head tax, which is why Seattle repealed it in the first place.
As for the parking tax, in testimony both Josh Kavanaugh (of the UW transportation office) and the Associated Students of the University of Washington (ASUW) attacked the parking tax for including nonprofits and being regressive. UW has come out against the tax before. Austin Wright-Pettibone of the Office of Governmental Relations of ASUW argued that “would affect our commuter students, who are among the lowest-income on our campus.” He also pointed out that “parking fees subsidize the UPass program” and feared that the increase would lead to higher UPass prices. Ms. Sawant asserted that “It is simply not true that UW Admin cannot absorb these costs,” which she cited as $2m annually, rather than pass them on to students.
Nevertheless, aside from Licata’s entirely correct point, it’s a bit rich to say a commercial parking tax (which is avoidable) is more regressive than the vehicle license fee they just passed (which is less so).
Tom Rasmussen argued that adopting different tax measures “would take more time” to work out the costs and mitigations for nonprofits like hospitals and colleges, and disagreed that off-street parking is truly “optional” for people. He said there was “even less consensus in the community” about the employee tax and it needed “more debate and development.” Meanwhile, Metro funding must move forward now.
All of these suboptimal provisions aside, this measure deserves your vote in November.
* Technically meeting as the Board of the Seattle Transportation Benefit District (TBD).