Morning Fizz
Translated into Dollars
1. Although Mayor Mike McGinn's press conference yesterday
ended up focusing primarily on City Attorney Pete Holmes' lawsuit to stop a vote on three deep-bore tunnel agreements between the city and the state, the official reason for the conference was to announce some grim news about the city's 2011 budget.
Thanks to lower-than-anticipated revenues from taxes and fees and likely reductions in state and federal funding, the city faces an estimated $16 million shortfall in the coming year.
Among the factors leading to the shortfall: A reduction in proposed parking-meter rates (originally, the city proposed significantly higher rates in many areas, which would have led to more revenues); gas tax revenues that have been lower than predicted, because people are driving less; lower utility tax revenues; and shortfalls in state and federal funding, among other problems.
As a result, McGinn has asked all city departments to come up with 3 percent reductions, with the caveat that they probably won't be asked to make cuts of quite that magnitude. However, McGinn cautioned, "no departments are untouchable, and no departments can be untouchable ."
The cuts would happen on or before July 1, 2011.
2. More specifics on the budget cuts:
City budget director Beth Goldberg noted that if Republicans in Congress pass their version of the federal budget, funding for Community Development Block Grants, which pay for low-income development projects, would drop around 63 percent in Seattle .
That's devastating enough , but in addition, federal law limits CDBG spending on homeless shelters to 35 percent of total CDBG grants. Translated into dollars, that means that "we should run up against that cap in a matter of weeks," Goldberg said---after which there would be no more federal block grant funding for Seattle's homeless shelters.
Also, Goldberg noted that the city's response to the recent snowstorms cost more than the city budgeted for, adding to the 2011 shortfall. The city planned to spend around $1.2 million ($654,000 in the 2010 budget plus $600,000 the city set aside as a contingency), but the real cost of snow cleanup was about $500,000 higher.
3. Asked whether the city had made any progress fighting a proposal by state Sen. Curtis King (R-14, Yakima) that would force Seattle to exempt the University of Washington from 50 percent of the city's commercial parking tax or forfeit all regional mobility grants and the ability to raise the parking tax in the future, McGinn said, "We're down at the legislature with everybody else arguing our case and communicating with the UW to see if we can reach an accommodation."
McGinn acknowledged that the amendment, which would cost the city $1.5 million a year if Seattle decided not to give the UW an exemption, is still very much in play.
4. In other Olympia news, state Sen. Jeanne Kohl-Welles' (D-36, Ballard) medical marijuana dispensary bill, which passed the house health care committee last week, and the full senate earlier this month with bipartisan support, is scheduled for an executive session in the house ways and means committee this morning. If the committee passes it—it's on its way to the floor.
Watch yesterday's ways and means committee hearing on the bill here where both Kohl-Welles and her Republican co-sponsor, Sen. Jerome Delvin (R-8, Richland) came to testify in support and where ways and means chair Rep. Ross Hunter (D-48, Medina) took a dig at the state's sacred tax exemption for the agriculture industry (estimated at $45 million per biennium.)
Indeed, when Republican committee member Rep. Bruce Chandler (R-15, Granger) asked if medical marijuana would be regulated by the department of agriculture or the health department, Hunter—referring to the fact that the bill is expected to generate money for the state ($3.2 million in the next biennium)—joked: "it clearly can't be agriculture because they're [marijuana dispensaries] paying B&O tax."
Thanks to lower-than-anticipated revenues from taxes and fees and likely reductions in state and federal funding, the city faces an estimated $16 million shortfall in the coming year.
Among the factors leading to the shortfall: A reduction in proposed parking-meter rates (originally, the city proposed significantly higher rates in many areas, which would have led to more revenues); gas tax revenues that have been lower than predicted, because people are driving less; lower utility tax revenues; and shortfalls in state and federal funding, among other problems.
As a result, McGinn has asked all city departments to come up with 3 percent reductions, with the caveat that they probably won't be asked to make cuts of quite that magnitude. However, McGinn cautioned, "no departments are untouchable, and no departments can be untouchable ."
The cuts would happen on or before July 1, 2011.
2. More specifics on the budget cuts:
City budget director Beth Goldberg noted that if Republicans in Congress pass their version of the federal budget, funding for Community Development Block Grants, which pay for low-income development projects, would drop around 63 percent in Seattle .
That's devastating enough , but in addition, federal law limits CDBG spending on homeless shelters to 35 percent of total CDBG grants. Translated into dollars, that means that "we should run up against that cap in a matter of weeks," Goldberg said---after which there would be no more federal block grant funding for Seattle's homeless shelters.
Also, Goldberg noted that the city's response to the recent snowstorms cost more than the city budgeted for, adding to the 2011 shortfall. The city planned to spend around $1.2 million ($654,000 in the 2010 budget plus $600,000 the city set aside as a contingency), but the real cost of snow cleanup was about $500,000 higher.
3. Asked whether the city had made any progress fighting a proposal by state Sen. Curtis King (R-14, Yakima) that would force Seattle to exempt the University of Washington from 50 percent of the city's commercial parking tax or forfeit all regional mobility grants and the ability to raise the parking tax in the future, McGinn said, "We're down at the legislature with everybody else arguing our case and communicating with the UW to see if we can reach an accommodation."
McGinn acknowledged that the amendment, which would cost the city $1.5 million a year if Seattle decided not to give the UW an exemption, is still very much in play.
4. In other Olympia news, state Sen. Jeanne Kohl-Welles' (D-36, Ballard) medical marijuana dispensary bill, which passed the house health care committee last week, and the full senate earlier this month with bipartisan support, is scheduled for an executive session in the house ways and means committee this morning. If the committee passes it—it's on its way to the floor.
Watch yesterday's ways and means committee hearing on the bill here where both Kohl-Welles and her Republican co-sponsor, Sen. Jerome Delvin (R-8, Richland) came to testify in support and where ways and means chair Rep. Ross Hunter (D-48, Medina) took a dig at the state's sacred tax exemption for the agriculture industry (estimated at $45 million per biennium.)
Indeed, when Republican committee member Rep. Bruce Chandler (R-15, Granger) asked if medical marijuana would be regulated by the department of agriculture or the health department, Hunter—referring to the fact that the bill is expected to generate money for the state ($3.2 million in the next biennium)—joked: "it clearly can't be agriculture because they're [marijuana dispensaries] paying B&O tax."
