The Taxman (and Woman) Cometh!

[00:00:10] Hello and welcome to another episode of Seattle Nice. I'm Erica C. Barnett. He is Sandeep Kaushik. David Hyde is still gallivanting in parts unknown this week, so you have the two of us getting along famously, I'm sure, as we have been in recent weeks, right, Sandeep? Yeah, raw and unfiltered. Yeah, Erica and Sandeep. I made it sound very dirty.

[00:00:37] Yeah, you really did. Or like kombucha, I don't know. Josh was pretty popular too. We had Josh Fight on. We did, yeah. That was fun. It's going to be harder for me to work in a Joni Mitchell reference now that Josh is not here with us. I know, because everything just goes sailing over my incredibly young head. I know. What kind of boomer stuff can I come up with? Maybe some, yeah, Neil Young or I don't know.

[00:01:06] Oh my God. Don't get me started on fucking Neil Young. Oh my God. His song about the maid. Anyway. I have no idea what you're talking about. Oh my God. We're already going off the rails from the very beginning. Yeah. So this week we are talking taxes. Mayor Bruce Harrell and city council member Alexis Mercedes Rink have proposed an increase in the business and occupation tax on some businesses.

[00:01:32] There's going to be an exemption for businesses gross revenues up to $2 million. And everything above that, the B&O tax would basically go up by about 50 percent. So pretty significant increase. This would have to go to the ballot because of just the way state law works. The city council can't just impose a B&O tax. So voters are going to get to decide on this in November, most likely.

[00:01:56] And, you know, I think that we were talking a little bit before we started recording, Saideep, and you mentioned, you know, this feeling kind of rushed. The city has about 45 days to discuss this, and then it's going to go on the ballot. Yeah, we're taping this on Thursday morning. It got announced yesterday afternoon. But really, the run-up to this has been really rushed. It really sort of first surfaced, and stakeholders started hearing about it.

[00:02:23] I heard about it probably less than two weeks ago. So, you know, it was probably only about a week ago that some of the key stakeholders, the business community and folks like that, were even getting briefed on the fact that this proposal was in the works and was, you know, about to be announced. And so I think that I've certainly heard a lot of carping about that from a bunch of folks, not just in the business community,

[00:02:48] but, you know, some folks at the council have raised concerns about why wasn't there some kind of process here to kind of figure out what we're doing. And if you want to do this big move, and it is a big move on kind of changing how the B&O tax fundamentally works in city, at the city level, B&O tax fundamentally works. Why wasn't there some process here, some analysis? What's this about? What's this for?

[00:03:15] A lot of questions, right, that have been swirling. Yeah, it's kind of interesting, you know, to compare this to the capital gains tax proposal that came out in the budget last year from Kathy Moore and from Councilmember Rank. I mean, that process was, I don't know if it was longer. It might have been a little bit longer, but one of the criticisms and one of the reasons it didn't pass was this perception that it was too rushed.

[00:03:41] They were proposing it, you know, to last minute and it needed more process. And this, I mean, this isn't even going to happen really in a public process. There'll be some council discussion about whether to put it on the ballot, whether to amend it, whether to put, you know, an alternative on the ballot, which seems pretty unlikely to me. But, you know, who knows with this council? But, yeah, I mean, it is happening very, very quickly. Now, behind the scenes, I know that this had been going, you know, discussions about this have been going on for about three months, but that's not the same thing as having a public process

[00:04:10] and a public discussion so that voters can really understand what it is they're voting on. I think the counterargument to that would be that, well, we need revenue of some sort. This is only on big businesses, meaning those that have gross revenues of over $2 million. But, you know, that too, I mean, not to sound like I'm, you know, speaking for the chamber here or anything, but that too is kind of questionable because when you're talking about gross receipts,

[00:04:37] and this is one reason, you know, the B&O tax is not considered that progressive, you know, that's not your margin of profit. So, I mean, just to get a little wonky for a second, if you're a business that takes in, say, $5 million in gross receipts, but your costs are $4.5 million, you know, you're not making that huge of a profit. So, it can be a little bit misleading to say, oh my God, like $2 million businesses are big businesses. I mean, that's a restaurant, that's a large restaurant, that's a grocery store.

[00:05:07] So, you know, I think that is, if you look at the Progressive Revenue Task Force report from a couple years ago, one of the things they say about B&O taxes is that they tend to be regressive for that reason. And so, there is this $2 million exemption and that applies to all businesses, you know, whether you're Amazon or whether you're a Wajamaya or whatever. But yeah, I mean, I think there's just a question about how fair this is going to end up being in practice. And I don't think that they know because I don't think they've done that analysis.

[00:05:35] Right. There are, you know, certain classes of businesses. Erica, you mentioned Wajamaya, but yeah, groceries, but also restaurants that are pretty low margin businesses. So, they have a lot of money coming in the door, but their margins on that money are very small. So, their profits are much, much smaller than that. And again, this isn't even a tax on profitable businesses. It's the tax on all businesses. So, to the extent that businesses have been complaining that they're, you know,

[00:06:03] that things have not been great for them, costs are rising, they're facing other issues. There's certainly been pushback on it. And as soon as this got announced, John Scholes, the head of the Downtown Seattle Association, called it boneheaded. I think he had a pretty strong statement that came out. But the Chamber of Commerce- That statement was wild. Yeah. Yeah, it was pretty, you know, eye-opening, right? It was strong.

[00:06:30] It was a, you know, and the Chamber had a more circumspect statement, but also expressing, you know, basically saying this is going to be in two parts, right? The exemption part, this, right now the B&O applies to any business with gross revenues higher than $100,000. So, this does significantly raise the exemption level to $2 million. So, a lot of very small or smaller businesses are not going to have to pay any B&O. But the reality is, B&O is not a big tax for smaller businesses. It's a small amount of money.

[00:07:00] Maybe a business will save, smaller business will save $1,000, a couple thousand bucks in taxes. So, not nothing, but not probably, you know, game-changing for any of them. Whereas a 50% increase in larger businesses adds up to a lot of money. And they anticipate that even with this bigger exemption, it's going to raise additional revenue north of $90 million a year, right? So, and it's going to be in two parts. The exemption part will be Councilmanic.

[00:07:28] So, it's going to run just at a council level. But as you said, because the city's already at its statutory limit for municipal B&O, for them to raise the taxes, the B&O tax, they're going to have to send it to the ballot, which means it has to get sent to the ballot by August 5th, right? The council has to be done with its process by the first week of August. And so, the whole thing is kind of being jammed forward here. The chamber kind of praised the exemption part.

[00:07:55] Understandably, it's something they've been calling for, raising the B&O exemption for a while, but obviously came out against raising the taxes on larger businesses' part. And look, I think there's a lot of talk that there are various political motivations at play here. Both Alexis and the mayor are on the ballot this year. I haven't seen it, but there's talk that the mayor got some polling back that was, you know, tepid about, you know, his standing,

[00:08:24] and that there was a perception that maybe the city wasn't taking enough action to deal with problems, and that she was reflecting on the mayor. You don't say. And that, yeah, right. And so, this seems to have precipitated a very rapid move to put this forward. And he's also facing a spirited challenge on his left flank from Katie Wilson, right? You know, who we've had on the podcast. And Katie's running, by all accounts, an energetic campaign.

[00:08:53] And she's raising money and all that kind of stuff, right? So, I think there's a lot of question about, is this about politics more than it's about good policy, right? Yeah, I mean, it feels like, you know, I was at the mayor's press conference yesterday, and it was very much like the mayor's press conference. And there was some interesting push and pull that was going on, you know, good-naturedly between Councilmember Rink and the mayor,

[00:09:20] you know, about, like, what is this measure going to be called? Because Rink is calling it the Seattle Shield Law because, in theory, and we'll get to this in a sec, you know, it would help offset, you know, potential future cuts from the federal administration, from Trump. And Bruce Harrell wanted to call it the 90 for 90 or something like that. I mean, it didn't, like, really roll off the tongue. But his, you know, his sort of campaign statement.

[00:09:47] Well, I'm going to say, so it's $90 million a year, and 90% of the businesses in Seattle would pay less in taxes than they do now, according to their analysis. Now, how much less? $5? Like, who knows? But I guess 90 is a bigger number than 76%, which is the percentage of businesses that would be exempt from this tax.

[00:10:12] So, you know, we're talking about 2,200 businesses that would pay higher taxes under this. So it is, you know, it is a relatively small number of businesses out of the city's 20,000 or so businesses. But, you know, it's a lot of businesses. And so I wanted to just get into quickly sort of what this tax is for. And I think this kind of also speaks to, like, the somewhat rushed nature of it,

[00:10:41] that it's being sold as offsetting Trump cuts. But we don't know what the Trump cuts are going to be yet, for one thing. And for another thing, the city is facing, and the chamber disputes this, but I think it is factually accurate to say, the city is facing a $250 million or so deficit in the next budget cycle. So this is $90 million a year. So, I mean, the idea is really this offsets some of that. And, you know, they're saying, oh, it's going to save all these human services programs.

[00:11:10] And there was a huge group of people from programs that are potentially at risk of being cut in the next budget who were there and supporting this bill. But basically, it's going into the general fund if it passes. So, you know, it's essentially just a budget shortfall fix.

[00:11:29] And I think that portraying it as a Trump shield is a little misleading, given that even if Trump was not president, they'd still be facing this massive shortfall. Support for Seattle Nice comes from Hearth Protection, offering commercial protective services with trauma-informed, community-oriented, and evidence-based physical security practices,

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[00:12:30] Yeah, I mean, the budget, $240, $250 million budget deficit, that number, I mean, it seems like that's the perennial number every year. Every year we have a $250 million budget deficit. Well, it's becoming that way for the last few years, in a way. I will say that number's pretty squishy, right? Like, yes, on paper there's a $250 million deficit, but there was a $250 million deficit last year, too, and they fixed it with barely any cuts, right?

[00:13:00] And similarly, this year, like, when you look more closely at the budget, one of the council members actually called me yesterday after the press conference to vent a little bit about this, but was pointing out to me that there's a $167, almost $170 million underspend from last year's budget. You know, maybe all of that money is not fungible, but probably lots of it are.

[00:13:26] Lots of it is that could carry over to this year that could, you know, itself pay for or, you know, address a lot of this, quote unquote, $240 million hole. Well, I just want to address that underspend question. I mean, I think that is a perennial issue, and I think it's one that the city has sort of said that they're going to try to get a hold of, never really have. And I think that is a good point. I mean, the city does underspend its budget every single year, pretty much.

[00:13:54] Sometimes by more than 10%, right? I mean, it's a pretty high underspend, percentage-wise. Even when you compare it to other cities that, you know, go through their budget. Oh, is that right? Yeah, yeah, yeah. I've looked at this. Yeah, it's high relative to like peer cities. Yeah. So the problem that has been sort of explained to me about, you know, just saying, you know, okay, in the next year, you know, let's say 20 departments underspent, each underspent their budget by this much.

[00:14:22] So let's just cut that from each of those departments. You know, it is, it's not entirely fungible and it's not entirely predictable which departments it's going to be. It's not like there's one department, like let's say HSD, the human services department, is not, you know, perennially underspending by $50 million that we could just cut. So it's, it's a little, you know, it's tricky. And sometimes that money is allocated to things and they just don't get it out the door by the end of the year because things don't always work out that way. Right.

[00:14:50] And so it's, it's tricky, which is not to say that the city shouldn't figure out a way to deal with that because that's so much money. There's a lot of money. And it could solve a lot of the budget problem. But it's, but it is, it is the kind of tricky, complicated problem that takes multiple years and politicians are frankly not very good at thinking in multiple years or even more than four years at a time. Right.

[00:15:12] So I think that's, that politics is a big reason that this isn't a priority year after year because, you know, it's just, it's more politically popular to say we're spending money on the programs you love than to say, you know, we're identifying waste in the city government.

[00:15:32] And, and so, you know, the, the city, when all these new council members came in the first year they were here, they did a so-called audit of the budget, which was not an audit at all, but it was, you know, a performative audit and they could say we did not it, but actually figuring out why the fuck they are underspending every year, you know, by five, 10, whatever percent is a much harder task. And I just don't think that, you know, any council has ever really wanted to take it on. Well, I do think there's a lot of frustration at the council.

[00:16:01] I've certainly heard it from various folks there that there hasn't been a real effort on the executive side. In fact, moves like this are a way to avoid taking a harder look at the budget and, you know, what's working, what's not, where do we have issues like the underspend issue? Why is our underspend so high relative to other cities?

[00:16:22] You know, why are there funds, you know, in the office of housing, there's almost half a billion dollars sitting, some for projects that have been sitting for, you know, that have not gone forward, that were budgeted five plus years ago. Right. And so what's going on with that money? Are those projects real? Are they ever going to happen? Why is that money? You know, there's a bunch of questions you could start asking if you really start to scrub the budget, which we really haven't scrubbed the budget in the city of Seattle since back in the McGinn days. Right.

[00:16:50] I mean, we've been gone through a long period of good times. And now that the budgets are getting tighter, there seems to be a resistance to, you know, changing anything internally. And it becomes easier, Erica, to your point, to just come forward and say, hey, let's do a new tax and Trump is bad and we should, you know, and we got to fight Trump. And, you know, and there are going to be – and that's not – I shouldn't minimize that.

[00:17:16] There are very real cuts coming and, you know, from Trump and stuff like that. But, like, again, this doesn't seem rushed. I mean, this seems rushed. It doesn't seem planned out. It doesn't seem, like, calibrated to figuring out how we fill holes. It is – it's a general fund budget hole plugger, right? Yeah. Well, I would say on the flip side of that, you know, I mean, like you're bringing up the tax side.

[00:17:45] I mean, let's bring up the spending side. So, I mean, and this is, I think, purely political. Last year in the budget, you know, when a lot of programs did have to take cuts and if you read through the budget, you know, you would – there was like a boilerplate at the beginning of every department or every division saying that they don't have enough money and so they had to take a cut. But the city also spent $100 million last year on new programs.

[00:18:08] And Mayor Bruce Harrell was, you know, number one offender, I would say, in terms of adding new programs that the city can ill afford, like surveillance cameras, like this real-time crime center. I mean, just a lot of stuff that is incredibly expensive, that's ongoing costs that we have to pay for every single year.

[00:18:26] I was just looking into – because I'm writing about the new graffiti proposal where they're going to impose, you know, a $1,000 fine for every time you, you know, scribbled your name on a piece of concrete or whatever. I mean, you know, but they're spending so goddamn much money on graffiti rangers and all this stuff that, you know, I don't think is probably most people's top priority. But it's political and it's, I guess, politically popular among the mayor's supporters.

[00:18:55] And not to pick on the mayor, I mean, there are plenty of programs from the city council too. And so, I mean, we also have a spending problem at the city. And I think that, you know, as long as people will have to run for office again, that's always going to be a problem. Your progressive membership card is going to get canceled. You just said the city has a spending problem. Of course it has a spending problem on cops. Yeah, yes. I mean – You just want to defund the cops.

[00:19:24] That's what's – no, but look, you're right. It's both, you know, sides of municipal governance. If I remember right, the mayor and the budget he sent down last year included a $40 million reserve, which the council promptly pretty much entirely spent. I think they left like $2 million or something de minimis in the reserve fund. And they took that $40 million as sort of carte blanche to spend it.

[00:19:50] And I recall at the time, I think it was Council Member Rivera in particular who was like, wait a minute. Is this prudent of us to just do all these budget ads on top of the mayor's budget at a time when we're facing future deficits and stuff like that, which that pretty much fell on deaf ears. Everybody had pet projects and political stuff they wanted to fund, and they did. So this week I was – I haven't written about this, but I did want to talk about it on the podcast.

[00:20:17] I was – not tweet, skeeted. I was posting on Blue Sky about it. One of those pet projects was from outgoing, you know, now resigning on July 7th, Council Member Kathy Moore, who got $2 million in the budget for women, people who are survivors of sexual exploitation, meaning basically sex workers on Aurora in her district.

[00:20:46] She set aside $2 million for a new receiving center, quote-unquote, in the budget. I don't love that term, but, you know, that's what she called it, for women who want to escape the sex trade and need a place to go, basically. And, you know, access to human services, resources, et cetera, et cetera.

[00:21:03] And at the time it was pretty clear that she knew where she wanted that money to go, which is to a group called The More We Love, which is best known for doing encampment sweeps and, you know, later outreach work in Burien for homeless people. Now they are, you know, sort of pitching themselves to the city of Seattle as an expert on how to get sex workers out of the sex trade.

[00:21:30] They have a house in Renton that they put people in and, you know, get them in treatment and so forth. So she earmarked $2 million to this purpose. There was supposed to be, you know, a whole RFP and contracting process, but eventually a million dollars went to this group, The More We Love. And I think it is a good example of the city sort of, or someone at the city, an individual deciding, this is where I want to spend this money.

[00:21:58] I have access to money through the city budget, and I'm going to put it there whether there is evidence that that is the most effective way of spending that money or not. There are many groups that do work on Aurora with women who are working up there, and they were sort of expecting to bid on the money. And I wrote about this, you know, earlier this year.

[00:22:18] That bidding process was completely short-circuited when Kathy Moore just said, nope, we're going to give this money to this woman, Christine Moreland, who runs this group, because I like her, more or less. And earlier this week, the thing I was posting about on Blue Sky is that she had Christine Moreland come into council with a couple, with three women who have gone through some sort of program run by The More We Love. And, you know, I mean, they basically spilled their traumatic stories for an audience.

[00:22:48] And I know that my voice tends to sound sarcastic. I think it is incredibly exploitative to bring people into the council chambers to relive their trauma in front of everybody in order to argue for money for yourself. And so it was just this very, you know, I mean, very upsetting. You know, Kathy Moore was crying. Mark Solomon was crying. The women were crying as they told their stories.

[00:23:17] Christine was crying. Everybody was crying. A lot of tears. A lot of tears. And it's like, okay, we're in city council. And the city council fundamentally, you know, they're not therapists. They make budget decisions. Sad stories.

[00:23:39] And if that's your argument, you know, what is your evidence that this particular, you know, person is, you know, going to be the most effective at turning people's lives around? Other than that, you have these three women here. They're telling their stories. They're saying they were helped by this group. Like, do we make any other budget decisions that way? I mean, I mean, I think the answer is yes, we do. Yeah, I think the answer is. But should we? I think we make a lot of budget decisions on fields, right?

[00:24:09] Yeah, absolutely. There isn't a whole lot of effort to, like, measure outcomes or results. To pull back, I mean, that's an amazing story. Yeah, I can just see I wasn't there. And I have no idea about the efficacy of this program. Maybe it's the greatest program in the world. There's obviously a need. I brought this up about how terrible the scene is on Aurora and the level of degradation and exploitation that's going on there with women who are being pimped out. So to the extent that there's some focus on that. But you're doing it too, right?

[00:24:39] No. I mean, like, that's not an argument for one policy solution over another. The fact of trauma and the fact of exploitation. Or funding one group or another, right? I'm agreeing with you on that. That's not a rational basis to make the decision. It's one thing to say, let's address this problem and develop some funding.

[00:25:00] But to your point, like, let's have some process here to figure out how best to deploy the money and then to measure the results so that we have some understanding of whether these dollars are actually delivering the kind of benefits that, you know, are intended. And there's not that much of that at the city. And this is a good example. But there's any number of other examples. I mean, I could make the same argument about we'll see where it goes in the future.

[00:25:29] But I'll put this on the voters voting for the social housing developer. Like, is that the best way to spend $50 million of housing money on this untested, you know, social housing program? I'm pretty sure the answer to that is going to turn out to be no. But the point is, we don't know. Nobody's measured it. There was no plan. We just, you know, appropriated now. We've made him the biggest housing developer in the city. And we'll see what happens kind of like in the future. Well, yeah. Yeah.

[00:26:00] Or to flip it, all the tactical shit and all the equipment that we buy for cops who say, well, what if we have a situation, you know, where we need, you know, all of this new technology, all of this stuff that we spend tens of millions of dollars on, you know, in case something, in case the shit goes down, you know, we need like we need to spend all this money on SWAT teams.

[00:26:22] And, you know, I mean, just the amount of like even less lethal weapons, like bowler apps, whatever, you know, we spend a fuck ton of money on whatever the police want and police toys. But, you know, is there evidence that we need all that crap? I mean, there's just I mean, I'm agreeing with you and I'm also pointing out it's not just, you know, social services stuff. It's all across the map.

[00:26:48] And so I yeah, I mean, I would I would love for the city to make budget decisions based on evidence. But that is not happening with this council as much as I would like to see. I mean, but I think it is like a perennial problem. But I mean, yeah, man, that was probably the last council, too. Yeah. Yeah. This this meeting this week. I mean, it was just it just felt like trauma porn. And it really felt it really felt exploitative.

[00:27:15] And it just it just pissed me off to watch those, you know, those women up there. And by the way, they were talking about all kinds of different programs that actually the city, you know, doesn't fund. I mean, the city, the more we love actually hasn't even signed its contract with the city yet. So none of this was from city money. And a lot of the stuff they were talking about was like, I went to Lakeside Milam with because Sarah Nelson got funding for Lakeside Milam in the budget because. Which is a drug middle class kind of drug treatment. Yeah. Yeah. Yeah.

[00:27:44] Drug treatment plan. Yeah. Yeah. And and alcohol. And and so that was like a completely different program, which also I would say, I mean, do we have an evidence basis that that particular company is the best company to provide, you know, to provide drug treatment? No, not necessarily. I mean, I think that's another one where, like, I think Sarah, you know, has said that she went to Lakeside Milam, really benefited from it. I went there as well.

[00:28:13] Um, and, uh, and that's why that got funded. So, you know, the more we love hasn't actually done anything for the city yet. I will say on that $300,000, I think it was for Lakeside Milam that there's been, I've heard pretty good things about the availability of those funds from providers like Lisa Dugard, right? For a PDA or reach has sent some of their, you know, another outreach organization associated with evergreen treatment services that send people to Lakeside Milam.

[00:28:40] And so it does seem that I think Andrea Suarez and her folks have sent people to Lakeside Milam. So sort of across the gamut of, of provided. Yeah, I mean, it's the main 28 day treatment program in the Seattle area. People have been telling me that there's, that that's actually something we probably should be doing more of, right? I mean, but, but, but to your point, are we measuring, are we like looking at like, you know, opportunity costs, cost benefit analysis? What, you know, what are the alternatives? Like, what are the results?

[00:29:10] And I'd say the answer is fucking no. We don't do any of that in the city anymore. It's become, we've become very complacent. The voters will approve anything we want. The politicians don't feel like they really have to be accountable about results. And so, yeah. Well, and to that point, I mean, just to, just to go back to the, the, the scene at City Hall the other day. I mean, the other thing, I mean, to, to your point about Lakeside Milam, I mean, yeah, it's 28 day treatment is great for some people.

[00:29:38] It works really well for some people, but I still don't think, I still think it's exploitative, you know, and I, and I say this as somebody with, you know, more than 10 years of recovery under my belt. One of the women that they, that Christine Moreland brought out was on like day 63 of sobriety had been to Lakeside Milam and was telling her story of success. And I don't think you should bring somebody with 63 days of sobriety, put them in front of the city council to argue for the success of your program.

[00:30:07] I just, I think that is like totally inappropriate to bring somebody in that early sobriety, present them as a success story, put them, you know, on a pedestal. I think it sets people up for failure. I think relapse is often a part of recovery as, you know, I've wrote a whole book about it. And, and I don't know. And just as a, as someone in recovery myself that I really felt like they did that person dirty. And, you know, that is just my, my soapbox on that issue.

[00:30:35] I just, I just don't think that is the way that we should be making arguments for public funds, because I think it puts people like real people, you know, at risk and, and exploits them. Hey, Seattle nice listeners, Seattle politics got you low. We'll get high with uncle likes pissed at the mayor.

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[00:31:36] I'm coming up on 23 years clean right in August. It will be 23 years for me since I last, last used. But anyway, yeah. So I'm, I'm kind of with you on the 63 days is not a long time and people do relapse. I relapse, you relapse. We all did right in, in our, in our, you know, kind of recovery journey. So, yeah. Yeah.

[00:32:01] And so, so it's a lot to, to, it's a, it's a lot of weight to put on a very, very fragile, you know, process, right. A personal process for people. So I will say this, just to add on to this, because, okay. So bringing it back to the tax stuff, right? So we have this B and O tax increase proposal and you and I both know this is not the end of it, right?

[00:32:25] As I understand, there's a, there's a city sales tax increase that's about to be coming and be announced. And, and then I think the county as well is going to propose a sales tax increase. The legislature authorized in the last session, one 10th for cities and counties of, of additional sales tax specifically for public safety function. And I believe both the city and the county are going to roll that out. Yeah.

[00:32:53] The county, the county has already proposed one and I think they're taking it up next month and at some point in July. And, and the, and the city, yeah, the city is likely to propose when I actually asked Harold about this in the press conference on Wednesday. And, you know, I mean, his, he was very equivocal, I would say he was like, well, you know, I mean, yes, it is because I, because just to be clear, like what that would do if both of those

[00:33:18] sales tax pass at the county and city and they don't require, you know, any voter approval, it would bring the city of Seattle's, you know, cumulative sales tax up to, I believe, 10.65%. It's already the highest in the country. And, and so, you know, I mean, people really feel that, you know, I mean, every time, once you're above 10% that you have to pay in sales tax on every purchase, I mean, I think it, it

[00:33:46] causes people to, you know, not want to make big purchases here and it just, you know, it boosts your grocery bills. You know, not all groceries are taxed, obviously, but it just, it makes, it raises the price of absolutely everything. So yeah, Harold said that he was going to take that deeply into consideration, the fact that it's regressive and the fact that we have such high sales taxes. But I mean, we'll see what that actually means. Does it mean that he'll say that we really need to consider that 1%, you know, increase

[00:34:17] before passing it? You know, does it mean that he'll maybe propose a slightly smaller increase with more capacity later? I don't know. But, but yeah. I kind of do know. Our sales tax is going to go through the roof. Oh, you do? Okay. Well, tell us more side to you. No, my, my understanding is that it's coming and coming relatively soon. And we're going to, and it's going to be, they're going to propose a 10th of sales tax. So, so again, you were saying to me yesterday, Erica, when we were talking in anticipation of taping this episode, like, I think this is right.

[00:34:45] Like cost of living in Seattle has gotten really, really high. Right. And this sort of constant, I feel like we're sounding like the Seattle Times from 20 years ago, but like there's, there's, there's, you know. Tax fatigue. Yeah. Tax fatigue. But at some point you do got to wonder, like, I'm not against taxation provided there's some clear purpose or problem that's being solved or there's, you know, and there's results that are coming out the other end of the process.

[00:35:14] But when we're just kind of raising taxes willy nilly, cause we don't want to like, you know, look at the budget or look at programs or measure outcomes or, you know, then, you know, you do start to wonder if we've just gotten on track off track and it's just become kind of, um, an easy get out of jail free card for everybody. Right. To just, yeah, let's just, voters will approve it, whatever, cause they're progressive and they, you know, uh, and they will approve it.

[00:35:43] But I also will say all the public polling does show that there's a kind of persistent level of frustration among the voters with, you know, kind of lack of progress and lack of results from city government. And that's a warning sign for the politicians. Right. And it's led to the volatility in our elections, you know, and the last council getting thrown out and, you know, and Tanya Wu losing big and her race against Alexis. And so.

[00:36:13] I mean, I don't think that's why Tanya Wu lost big. But there, there is a lot of voter frustration, public frustration, right? For sure. Yeah. For sure. And I mean, you know, and, and I do think like, what is the, I mean, on sales tax specifically, the most regressive tax, it overwhelmingly hits lower income people more heavily. Everybody has to pay it, et cetera. You know, at what point, I mean, are we going to stop at 12%? Are we going to stop at, you know, 15%.

[00:36:41] I mean, these, you know, these little literal nickel and dime things. I mean, you know, once they are hitting everybody, as opposed to like, say the jumpstart tax, which truly is on bigger businesses, you know, or I guess in theory, this B&O tax. Although I think that, you know, it has been shown pretty conclusively that the B&O taxes, you know, for retail businesses, for, for businesses that people use directly. I mean, they, they get passed directly onto consumers.

[00:37:09] And so people see those price increases too, but you know, I mean, yeah, it does. I hate to sound like the Seattle times and, you know, and say, well, at some point voters are going to, you know, get frustrated with all these taxes. But I mean, particularly with sales tax, I mean, I am frustrated. I don't want to pay any more sales tax. I think it is too high now. And, and so I think that these, and particularly to pay for, you know, for police, I mean, the fact that Bob Ferguson, this is, this was his solution and his way of, you know, fulfilling

[00:37:39] his promise to spend a hundred million dollars on police in the last session on cops. Yeah. It was to like, was to pass it on to, you know, to local funders like the city of Seattle, like King County. I mean, smart on his part because he gets to pass the buck, but I mean, man, just an ever increasing sales tax. I mean, you actually do hit tax fatigue with that, but every single time you go to the store,

[00:38:05] I mean, you know, I would, for a big purchase, I'd go to Portland, honestly, like I'm not going to buy, you know, something big and expensive in Seattle unless I have to. I mean, if it's going to be, if it's going to be 11% sales tax, that's just, I mean, that's nuts. That's outrageous. Obviously there's need out there. Like the, the county tends to increase like the, the, the county, you know, I've had this conversation a while back, but had this conversation with, with Lisa Mania and the King County

[00:38:32] prosecutor, like the, the, the, the, the courts and public defense system, you know, are severely strained, right? You know, there is there, you know, there's just been some recent decisions about caseloads with public defenders and stuff like that, that are, that are making it even worse. And it was already bad before that, that stuff. And so there is need to kind of shore up some of our, you know, municipal and regional systems to make them work better.

[00:39:01] So I, I get it that there's some, some need for some funding. Hey, you know what we could do? Yeah. You know what we could do is we could reduce funding for what's the biggest department again? Oh, right, right, right. Uh, the police. Yeah. And put some of that money into some of these other things that we need money for, like the courts. Yeah. Like all these human services programs that are getting cut. Oh, but wait, that would be defunding the police. So we can't do that. Why don't we just.

[00:39:31] Because we're basically, that's, that's basically the same thing as rioting in the streets and, you know, and breaking and looting and setting things on fire. So, so we certainly, when we're scrubbing the budget, the one thing that we definitely can't look at is the cop budget. Wow. Yeah. Well, I could counter that. I don't want to go down this rabbit hole. I could counter that. Why don't we just legalize all the quote unquote crimes of poverty? Let's make shoplifting legal. Like basically like the previous city council idiotically, like, like started to, you know,

[00:40:00] float this idea of allowing addiction to be in a defense for stealing stuff. And like, you know, or, or let's have no laws against, you know, public use of hard drugs. And so anyway, whatever we can, we can argue about priorities here, but I think we're in agreement that like, where's the, where's the, where's the focus on, on results? Like, you know, there's this whole. What's the end game? Right. Right. Meaning like. Yeah.

[00:40:30] Yeah. Sorry. Go ahead. No, I was going to say, there's this whole kind of elite level discourse over the last six months about sort of abundance, right? The Ezra Klein stuff. But where I think the abundance stuff is really right on the mark is that progressive governance, particularly in blue cities, like is emblematic of, you know, the democratic party writ large. And if that government is not delivering results on housing, on homelessness, on, you know,

[00:40:57] any number of big issues, that's, it's, that's bad. Right. And we should look at what the impediments are. You know, if there are, if we have too many regulations that are, that are delaying our ability and raising the cost to build enough housing, let's, you know, we ought to be looking at stuff like that, even if they. But we're not, I mean, we're doing the opposite. We're like, you know, for, and I, I read that book.

[00:41:23] I did not love it, but I, but I do agree with some of the deregulatory proposals. But right now at the city, you know, they are like talking about reopening the tree ordinance to impose more regulations and to make it harder to build housing because, you know, you have a subset of homeowners who really want, you know, to force their neighbors to keep their trees, essentially. I mean, and that's just one example, but that's like the regulatory state gone, gone wild.

[00:41:52] I mean, we already have a very strict tree ordinance and, and the city council, you know, instead of, I think, figuring out how to make, and the mayor too, I mean, just city government writ large, instead of trying to figure out how to make housing cheaper to build are talking about let's revisit this ordinance that we just passed to make it harder to build. Yeah. And I will say, look, look, it used to be much more common that the way we got to higher taxes

[00:42:19] was somebody, some elected official would step forward and say, Hey, I see this problem, problem X over here, untreated mental illness, untreated, you know, addiction on our streets. And I've done this stakeholder work and created this process. And we've come up with a plan to, you know, address the problem. And here's how much this plan costs. And here's, you know, the, and so let's figure out how to fund that. Right. And then you get to a tax increase.

[00:42:47] Now we're kind of seem to be taxing first and sort of, well, let's figure out the plans later or, you know, like figure out who gets the money or how it, you know, and that just seems ass backwards to me and, and, and not conducive to producing. It breeds public cynicism then, cause you don't get the results. And people are like, why do I keep paying more and more in taxes? And things still feel kind of shitty in the city of Seattle. Like it just pisses people off. Like, and anyway, I just, I just think like we've gotten off track in a bigger sense.

[00:43:17] And this, these, these proposals are in some sense indicative of that, even though I will say on the, on the city sales tax side too, we were talking about the County and the need for the public safety system. But I do think that some of that, I'm hopeful that a piece of this increased sales tax money will go to some, and I don't want to get ahead of this, but there's been some conversations between some very smart providers and some elected officials at the city.

[00:43:45] It's about things we could do if we had some more resources to address things like untreated mental illness and addiction. And I'm hopeful that they'll, they'll end up, you know, funding some of that based on a clear plan to like, you know, um, fix a problem. And if that's what they do, that's great. I'm all for it. But if we're just going to raise taxes to like backfill our budget so we don't have to like, you know, do any of that work, like that's not, um, something I'm super, super. All right. Uh, that is it for another episode of Seattle Nice.

[00:44:14] Uh, I'm Erica C. Barnett. He's Sunday Project. Our editor is Quinn Waller and we will talk to you next week. Yeah. Bye bye.