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McGinn Says Tunnel Overruns Could Lead to Human Service Cuts; Council Doesn't Agree

By Erica C. Barnett July 20, 2010

In a conversation with reporters this morning, Mayor Mike McGinn said he believes cost overruns on the deep-bore tunnel could lead to cuts in city-funded human services—a concern expressed by many of the 34 people who spoke at yesterday's meeting about the proposed agreement on the tunnel between the city and the state. During that meeting, council staffers said there was no way overruns could impact the city's human service funding.

First, the council's reasoning: In a response to a question from council member Sally Bagshaw yesterday, council central staff director Ben Noble pointed out that human services are paid for by the city's general fund; in contrast, the language in state legislation about cost overruns (cost overruns, according to the legislation, will be paid by "Seattle-area property owners that benefit" from the tunnel) implies they would be paid for by an additional new property tax, not out of existing property taxes. That wouldn't impact the general fund or the human services it pays for. Additionally, staffers pointed out, nothing in the state law puts the city as a corporate entity on the hook for overruns; instead, it says property owners will pay directly.

"There is no reason [requiring the city to pay for overruns] would threaten the revenue sources" for human services, which include existing property taxes, sales taxes, business and occupation taxes, utility fees, and other miscellaneous taxes and fees, Noble said.

McGinn's response this morning: First, the state legislation doesn't specify that overruns will be paid for by property taxes; it merely implies as much. For example, he said, the state could order the city to fund overruns out of the budget for the city's transportation department. (Council staff disputes that the state has the authority to do this).

Second (and, to my mind, more compelling): While it's true that human services are funded largely for by the general fund, many other important services—including housing, libraries, and parks—are funded by voter-approved levies. An additional property tax to pay for cost overruns on the tunnel, he argued, could impact voters' appetite for other levies. Depending on how the state defines "Seattle-area property owners that benefit"—is that just property owners on the waterfront, or property owners throughout the city?—an additional tax burden could help sink a future levy, McGinn argued.

"There's only so much appetite to pay property taxes for various reasons ... so the idea that there's some magic pot of money that's available to pay for services is inaccurate," McGinn said.

Editorializing briefly: Whatever you think of his legal arguments, framing the tunnel debate around human services is a political master stroke for McGinn. During the campaign, human- and social-service advocates mistrusted McGinn, worrying that he cared more about biking and eco-urbanism (density, transit, development in places like South Lake Union) than things like housing and services for the working poor and homeless. Then McGinn vetoed council member Tim Burgess' proposed panhandling ordinance, sealing his alliance with those advocates. In return, they're now supporting his position on the tunnel—testifying at council meetings and most likely proposing a referendum, along with unlikely allies the Sierra Club, on the cost overruns issue. Brilliant.
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