Seatax fatigue may affect Sammamish tax need

Sound Transit 3 would not have passed without an overwhelming Yes vote from Seattle. The tax hike still is reverberating. (Sammamish voted 52%-48% against this new tax.)

Dow Constantine, King County Executive headquartered in Seattle, proposes a $469m countywide tax for arts.

Seattle Mayor Ed Murray proposed a $275m five-year city tax to combat homelessness. Then he dropped the idea and proposed instead a county-wide tax that would raise $335m over five years.

Seattle never met a tax it didn’t like. Despite the suburbs often rejecting new taxes, the overwhelming concentration of Yes votes in Seattle usually carriers the day.

It’s not Seattle anymore. It’s Seatax.

And Seatax fatigue may make it harder for Sammamish to raise taxes for new road projects or land preservation acquisition.

The need for Sammamish taxes

The need for Sammamish taxes has been apparent since at least 2015. The City is simply outspending its revenue sources.

The root of this goes back to decades of neglect by King County before Sammamish became a city in 1999. Since then, through 2015, Sammamish invested $250m (or, to put it another way, a quarter of a billion dollars) in infrastructure, parks, creating the Sammamish Commons, road maintenance and other capital expenditures.

By 2015, the trend line was clear: in the coming years, Sammamish would need more revenue to fund future projects.

Then-Mayor Tom Vance killed a discussion of city finances in 2015, a year in which he was seeking reelection.

City Council Member Ramiro Valderrama began raising the alarm in 2015. But he was in the minority on the Council and then-Mayor Tom Vance was facing reelection. Vance, aided by then-City Manager Ben Yazici, denied the obvious and Vance stifled Valderrama’s efforts to have a study session or retreat to address the coming financial problems.

Vance was defeated in the November 2015 election and Yazici retired the following March. Lyman Howard, Yazici’s deputy, had been designated the successor. Howard began raising warning flags even before he officially assumed the City Manager position, but by the time he did in March 2016, the budget was already in place.

Paying the piper

Howard, by now City Manager in his own right, continued to project deteriorating finances, now placing the so-called “crossover point” in 2020, when operating expenses would outpace revenues. (Dropping the politician-speak, the crossover point is when the City goes into deficit spending.)

But this emphasis on operations ignored the capital spending plans. Road projects identified in the six-year Transportation Improvement Plan (TIP) had a price tag of $90m-plus. The City didn’t have the cash to pay for these.

The TIP is essentially a wish-list required by State law for concurrency projects and development. Some projects have been on the TIP for a decade without Sammamish proceeding with them. But the piper was coming.

Council Member Tom Odell was fond of pointing out that Sammamish had neglected major road projects for 10 years and a bond issue almost certainly would be needed to fund them. (Odell is retiring at the end of this year after two terms on the Council.)

Finally, a serious discussion

Valderrama continued his campaign throughout 2016 for a financial study sessions and/or retreat. During the Council’s annual retreat in January 2017, he finally succeeded.

A round table is scheduled for April 27 from 5-7 at City Hall to begin dedicated discussions about the City’s finances. A full retreat is scheduled for June 29, also at City Hall.

In the current City survey of residents, there was modest support for new taxes for road projects and strong support for new taxes for land preservation acquisition. The devil, however, is always in the details.

Issaquah voters rejected a $50m bond issue for road projects. (It passed a majority but failed to gain the 60% super-majority needed.) Issaquah needed voter approval because it was out of bonding power under previous authority.

Sammamish is virtually debt free and the Council has the ability to issue hundreds of millions of dollars in bonds without voter approval—if there is the political will to do so.

On the other hand, if the City Council wants a vote to give them cover, the plethora of new taxes from Seattle-driven interests may dampen enthusiasm (such as it is) for voter approval for new taxes in Sammamish. Sound Transit 3 alone adds more than $1,000 annually to the tax burden of a large number of Sammamish residents.

Then there is what may be coming from the State to fund education. The State Supreme Court ordered the State to step up to its paramount duty to fund education. The ruling, called the McCleary Decision (for the plaintiff in the case), requires billions of dollars in new spending by the State, money it doesn’t now have.

One solution, proposed by Republicans, is to make property tax adjustments in the wealthier counties to support the less-well off. This means a tax hike in King County (and Sammamish).

This solution hasn’t met with a lot of favor from the Democrats and the outcome remains uncertain.

But with tax after tax after tax from Seatax and the prospect of more taxes from the State, will Sammamish taxpayers be as willing to step up in reality as they were in a telephone survey?

 

 

 

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This entry was posted in City Council, King County, Sammamish, Sammamish City Council and tagged , , , , , , , , , . Bookmark the permalink.

5 Responses to Seatax fatigue may affect Sammamish tax need

  1. Miho Reed says:

    Thanks for bringing this up. It’s an important question.

    Is there any plan for Sammamish to back opting out of Sound Transit tax per Dino Rossi’s proposal? Sammamish needs to step up to protect the interests of its residents.
    https://www.google.com/amp/mynorthwest.com/546029/dino-rossi-sound-transit/amp/

  2. Stan Gunno says:

    Was Mr. Howard the Finance guy for the City before he got the Manager job?

    • cityhamilton says:

      At one point, yes he was. Then he was elevated to Dep City Mgr and a new Finance Director hired. (The latter tragically died from cancer last year.) I don’t know when the transition occurred without doing some research.

  3. Pingback: Sammamish finance retreat Thursday to ponder whether new taxes needed | Sammamish Comment

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