While the public cheered last session's omnibus stadium bill for phasing out the stadium taxes and replacing them with more popular arts and workforce funding taxes, four words quietly added to the bill at the last minute will hit Seattle taxpayers with a new $300,000 bill annually, PubliCola has learned.
In the final days of this year's special legislative session, state Sens. Scott White and Ed Murray quietly added an amendment to legislation that would have extended the hotel/motel taxes to pay off debt on the Kingdome and Qwest Field. (The bill that was ultimately adopted dedicates the taxes to pay for arts and housing, but not until 2021).
The amendment, which includes the addition of the four words "or a baseball stadium," effectively gives the public authority that runs Safeco the right to charge a 10 percent commercial parking tax at Safeco's parking lot---and prohibits the city from continuing to levy its own 12.5 parking tax once Safeco does so.
The cost to the city, according to city finance director Beth Goldberg? Between $200,000 and $300,000 a year. "It's real money," Goldberg says tells PubliCola. The budget office did not factor the loss into its 2012 budget, announced Monday, simply because they didn't know about it.
City council president Richard Conlin characterized the situation more bluntly. "They're stealing $200,000 from us," he said.
In a letter to Finance and Administrative Services Department director Fred Podesta dated September 23, Washington State Major League League Baseball Stadium Public Facilities District board chair Dave Sperling wrote, "Under the legislation, no city within the baseball stadium is located may 'impose a tax of the same or similar kind on vehicle parking charges at the facility.' Because this change will affect revenues collected by the City, the PFD wanted to make sure you were aware of it."
Most of the people I talked to at the city were not, in fact, aware of it. Conlin's mention of the PDA's new tax yesterday was the first inkling that budget director Goldberg and city council members had that the city is poised to lose millions of dollars in parking revenues due to the legislation, which has no expiration date.
Mayor Mike McGinn's spokesman Aaron Pickus tells PubliCola he had not heard about the tax.
The PFD is essentially a quasi-public entity with the authority to charge taxes "to pay off bonds and for repair, reequipping, and capital improvement." What's more, again under authority from the legislature, they can do so without a public election. (They can also let contracts, up to a certain size, without a competitive bidding process.)
Why would two Seattle legislators work so hard to add an amendment into otherwise unrelated legislation granting a massive tax break to the stadium authority? Moreover, why didn't anyone from the city sound the alarm?
The second question—why no alarm bells?—is easier to answer than the first. White and Murray's amendment was added in the final days of the special session, when there's almost no time to vet bills closely. Nor is there much incentive to read the fine print of a bill like ESSB 5834, which the city had already vetted, sans parking-tax amendment, more than a dozen times.
"It was a late amendment at the very end of the session," city lobbyist Craig Engelking says. "We're concerned about the lost revenue in light of the city budget," which already faces an $18 million shortfall.
The answer to the second question is less clear. Although the stadium PFD was reportedly lobbying legislators to include the tax exemption, PubliCola was unable to confirm this directly; White has not yet returned a call, and Murray is out of the country. Murray, of course, is considering a run for mayor, making his gift to Safeco particularly surprising.
Mariners spokeswoman Rebecca Hale says there's precedent for the special Safeco tax: Centurylink Field, formerly Qwest Field, is already authorized to charge a similar tax. Although Qwest (which is run by the Washington State Public Stadium Authority, another quasi-public entity) currently only charges a parking tax of 1.2 percent, a spokeswoman for the authority says the tax will go up to 10 percent starting in 2021, once the bonds on the stadium are retired (something a 2008 presentation to the council confirms).
Conlin says he's asking City Attorney Pete Holmes whether the city has any recourse to prevent Safeco from taking away its parking-tax authority. Holmes' spokeswoman Kimberly Mills says she has not yet gotten a request from Conlin to look into the taxing issue. Katherine Schubert-Knapp, Podesta's spokeswoman, says, "This is a change in state law and the Department of Finance and Administrative Services (FAS) will implement it. ... We will not levy the commercial parking tax on parking at this facility."