♪♪
-Welcome to City Inside/Out.
I'm your host, Brian Callanan.
From dealing with a regional homelessness agency that's in
financial crisis to a ballot full of federal, state, and city
races, get ready for a busy summer of local politics ahead.
-They are millions and millions and millions in the red.
-And in a way, that organization was set up to fail.
-A troubling financial audit has fanned the
flame of a growing debate.
Should King County shut down its regional
homelessness authority?
-Seattle City Council will come to order.
Local leaders are wrestling with that question as
Seattle expands its homeless shelter network this summer.
But in the meantime, the August primary features the race to
replace interim D5 Seattle City Council member Debora Juarez.
-You lead to leave, and you're bringing up this
next set of leaders.
-Plus, voters are preparing for a full slate of federal
and state races this fall, potentially along with a
measure that would roll back a controversial
income tax on high earners.
-It's not a millionaire's tax.
It's an everybody tax.
-What are the big headlines you should be tracking?
-When they see those two words together on a ballot,
they just want to say no.
-Our panel of journalists weighs in.
-As it stands right now, a lot of these levies are
being sold as basically propping up the city's budget.
-There's a big blow-up over this behind the scenes.
-A look at the top stories of the summer ahead,
next on City Inside/Out.
♪♪
-Thanks once again for joining us here on the Seattle
Channel for City Inside/Out.
Brian Callanan here with you, and I have with me
three journalists to help look ahead at the top
headlines of the summer.
First up, Erica C.
Barnett, founder and editor of the news site
Publicola. Erica, good to see you.
-Great to be here.
Next to her, the lovely and talented Jerry
Cornfield of the Washington State Standard, coming
up from Olympia.
Really appreciate you being here,
Jerry. -Thanks to you.
-All right, and also with us rounding
out the group is David Kroman, City Hall reporter for
The Seattle Times.
David, thank you for being here.
-Thanks for having me.
-Let's jump into this.
David, let me start with you, actually.
I want to talk about the call to possibly shut down the King
County Regional Homelessness Authority.
This is going to be a big headline, ongoing headline
this summer.
A recent audit found that the agency was about
$40 million in the red, couldn't account for maybe
$13 million of its total budget of $205 million.
There's King County Councilmember Rod Dembowski
is saying shut it down.
Seattle City Councilmember Maritza Rivera is
wanting that, too.
Are you surprised that we're in this position right now?
And I guess we're about six years after the KCRHA launched.
-I don't think I'm surprised.
You know, I think when you talk to people, there is a sense that
there was kind of a fundamental weakness in the King County
Regional Homelessness Authority, which is it was kind of—it
was intended to be—to sort of turn down the political
temperature around homelessness.
But there is some realization that maybe in trying
to do that, it actually— -Centering up the
experience of the homeless.
-Yeah, centering up the experience of people
experiencing homelessness.
But there's some sense that in trying to do that, it kind
of too easily became something that was apart from a lot of
elected lawmakers' consciousness and sort of too easily ignored
and put off in a different part of people's brain and
thinking, and therefore kind of became an easy scapegoat.
And so I think there's some sense that perhaps, you know,
the way it was set up and where it was positioned, it
became kind of too easily forgotten, and as a result,
some of the financial practices were allowed to slip
and accountability was weak and therefore got into the place
we are, which is some pretty significant weaknesses
that I think go beyond just the top line numbers
that we've seen around $13 million.
It's really about how you conduct or should
conduct business in an organization like this,
which has, you know, $200 million passing
through it every year, it has to have really
strict financial policies, and the conclusions are
it just really did not.
-Yeah. Erica, I know this is a moving target here,
but is it a done deal that the KCRHA is going to get shut down?
What do you think?
-I think it's going to get shut down.
I don't think it's a done deal, but everything, I mean,
everyone that I've talked to, you know, from board members
to elected officials who are not on the board, you know,
seems to indicate that the process that it would take
to actually fix all these problems.
I mean, and it's just -- it's stuff that you --
is kind of unheard of, like the same person being in charge
of, you know, an accounting, you know,
a program from the very start, approving it to the very
end, saying, you know, all that money was
spent correctly.
I mean, there's just -- there's segregation of funds issues.
There's, you know, lots of stuff.
So it would take about a year and around a million dollars,
according to the auditor, to fix this.
And I think there's just not a lot of appetite
for that right now.
-Yeah. And just a lack of accountability,
too, it sounds like.
-Yeah. And I would say, you know,
from the beginning, I mean, these practices
were sort of instituted and there's a culture, I
think, at KCRHA of just kind of not tracking
things properly.
And that leads to, you know, these
massive, I mean, there are also $63 million
in the red right now.
So So there's just huge, you
know, intrinsic problems that I just think that this
is like the last strike.
-It's going to be a challenge for sure.
Jerry, I'm going to try to pull you in here because the State
Department of Commerce kicks in about 8% of the KCRHA's budget,
nearly $16 million for work like the Right-of-Way
Safety Initiative along the highways, et cetera,
helping people who are living there.
So there's a state, federal, county, city, a lot of
funding going into this.
I just wanted to get a big picture view from you with
headlines like these about financial problems, etc
What is the state's appetite,
do you think for helping counties with this work when
something like this happens?
-In my sense is the lawmakers in the region are the ones
that are most informed and they are going to press
locally, but even you mentioned the right-of-way safety
initiative when that started out there was a lot of conflict
between the state and the cities and especially
Seattle so they took a while to figure out how to
work together on something that was pretty right
there in the public eye everyone could see it
happening and what wasn't happening and the state has
its own issues about how much it is spending per
person to try to help shelter individuals there's been
questions raised about some of their other programs
so you know this is just a large issue that I
don't think anyone really wants to wrap their arms
around at the state level.
So they're kind of standing back and enjoying, I
think, to some degree, the debate that's going on
in the largest county.
-I'm going to find a different verb for
that, but I understand what you're saying there, Jerry.
Exactly. Jerry, let me jump back to you.
I want to talk elections here.
So there's a signature gathering effort that's underway right
now to put an initiative on the the ballot for the fall.
This would repeal the high income or excuse me,
high earners income tax, the so-called millionaire's tax
the legislature passed earlier this year.
This comes from “Let's Go Washington” and Brian Heywood,
who's pushed back in a number of measures from the Dems who
control Olympia right now.
I know that taxing the rich has been a pretty
popular political stand in our state the past few years.
How do you think this initiative is going to do?
-At the ballot, It's going to be, at this
moment, if it gets to the ballot, I really, you know,
it's going to be hard.
I think the mood is not to see an income tax
in Washington, right?
The voters, when they see those two words together on a ballot,
they just want to say no.
I mean, just two years ago.
-Even if it is focused on higher earners, the top 0.5 percent?
-I mean, there's obviously no trust that it's
going to stay there.
It's one line.
I mean, if we look back two years ago, voters, Brian
Heywood and company got 400,000 signatures on an
initiative that says no income tax, state, city, county.
And the legislature just took it and they adopted it as law.
And so now they're going against that two years later.
And so I don't think there's any real inherent trust that
that income tax level will stay at a $1 million and
above as it's targeted to be.
-And I guess the other one for “Let's Go Washington,” it's also
behind this measure to ban kids who are transgender from
playing in girls' K-12 sports.
Where do you want to start with that one?
-Well, that one and the other one that the “Let's Go
Washington” has, I mean, they have potentially three dealing
with the parental rights.
-That's right, as well.
-And access to information with children.
Those are really two hot-button issues in the sort of
the culture wars that we continue to have out there.
So if I had, I think the polling shows, the early
polling shows strong support to pass both of those,
whether or not the political debate, whether there's money
to actually enunciate what they will do, what it means.
The number of individuals who are involved is not
high, but the policy level of who's going to dictate
what, you know, how our young athletes are competing.
I think the voters are probably going to weigh
in and that one may pass.
-Yeah, yeah.
I will see what happens there.
Erica, let's talk elections in Seattle, if we could, and
the race to replace interim D5 council member Debora
Juarez in North Seattle.
We'll have a primary election in August.
It appears Julie Kang, co-chair of the King County Immigrant
and Refugee Commission, has an early lead in money raising.
You've got Nilu Jenks, who ran and lost for this
job in 2023, appears to be the main challenger.
Health care advocate Silas James also in the mix.
How do you see this race shaping up?
And bigger picture, what does it mean for the political
makeup of the city council?
-Well, I mean, this is a pretty pivotal race in the sense
that, you know, if Julie Kang wins, I think she will be more
on the sort of traditional D5.
I don't want to say conservative, but more moderate
centrist side compared to Nilu Jenks, who is the kind
of progressive frontrunner.
Now, she did come in third.
Cathy Moore won.
This district does tend to be a
little bit more centrist to conservative historically.
so I mean, but we now have a council that is, you know,
let's say four progressives, five less progressives.
so this could swing the council on a lot of central votes.
so I think it's a really important election.
Tends to go more towards the Debora Juarez, Cathy
Moore moderate side,
but we'll see.
I mean, Nilu ran last time.
I think a lot of people were kind of, or at
least I was surprised that she did so poorly.
so maybe she'll have a shot this time.
I don't know.
Yeah, it just depends on how well Julie Kang performs
because she's another unknown.
-Yeah, going to have to build a lot on that one.
David, let me jump to you because there's another issue on
the August ballot that I think is most likely going to pass.
I'm talking about the renewal of the library levy.
Three out of four people said yes to it in 2019, and it
would be interesting if it didn't pass again this year.
Let me say that.
You've written about this story, kind of the story
behind the story here.
There's a cap on the total dollar amount in
levy money Seattle can take from its residents.
Can you explain what's going on here and how this
library levy, which is bigger than the last one and more
than likely going to pass, it's gonna push Seattle
closer to that limit.
Let's talk about that.
-Yeah, it's an interesting time, and it's interesting
that the library levy has become the sort of face of
this because compared to, say, you know, transportation or
housing or even education,
it's actually not that big.
It's about a third of the size of those other ones.
But because those other ones passed before it,
Seattle has gotten to this point of nearing its $3.60
per $1,000 of assessed value.
You know, it's a little weedy cap that the state
puts on property taxes that it's able to raise through
these kind of straight levies.
You know, I think for years—and, you know, people in the
city's budget world have told me this—the assumption in
City Hall was either voters would stop approving these
levies or lawmakers would maybe at least cap their
size or shrink their size.
Neither of those things have happened.
And voters have enthusiastically supported all the levies,
and they have continued to grow.
And it puts Seattle in this uncomfortable position for
really the first time that I have read about, where they have
to consider—they kind of have to triage a little bit, or kind
of find alternate doors to raise the sort of property tax
revenue for its priorities.
And I think that's a little bit uncomfortable position
for the mayor and city hall to be in because they
haven't needed to do that.
-Because business was so strong before.
Sales taxes were great.
Property taxes were great.
-Yeah, because the assessed value of property was
raising so quickly.
And, again, they just, you know, they hadn't
really gotten particularly close to this cap before.
It sort of had this feeling of that it was
this endless resource that they could continue to
tap for their priorities.
You know, I think even, you know, one step deeper beyond
this is this kind of question of, and I know Erica has
written about this and thought about this, of what levies
were supposed to be doing and what they're actually doing.
Yeah. The kind of main theory behind levies is
they're supposed to be additive.
They're supposed to bring a new program on
top of kind of basic services that the city covers.
-Rather than providing 30 percent of the Department
of Transportation's budget.
-Exactly. But as it stands right now, a lot of these levies
are being sold as basically propping up the city's
budget in a way that has worked out basically so
far because voters have have been generous, but
it is starting to feel a little bit like a house
of cards where if one of these levies goes down,
you know, again, like you said, it's 30% of the
Department of Transportation's budget.
That's a really precarious place for them
to be in.
-Yeah. Erica, I saw that look in your eye.
Did you want to say something about that?
-I just wanted to add one thing.
I mean, in addition to propping up the budget,
these levies now are, and this happened with the
parks levy as well a few years back, these levies are
largely about maintenance.
So you have like a capital levy,
you build all these beautiful libraries and
now they're falling apart.
You go to the central library, it's just looking
pretty shabby.
And so this is sort of additive
in that sense.
I mean, we built all these things,
but we didn't have a plan to maintain them.
And so if we want to maintain them, then we
have to pass another levy just to take care of the
assets we already have.
-That's a big question for voters this summer, for sure.
Jerry, let me jump to you because the
The city of Seattle is definitely not the only
government agency going through some budgetary
challenges right now.
Could you talk about what's happening at the state level?
Because you wrote recently about Moody's, one of the big
three credit rating agencies, downgraded its outlook for
Washington state finances from stable to negative.
That doesn't sound great to me.
What does that mean?
What's going on?
-It doesn't sound great to me either.
But, yeah, they don't have library levies.
But if they could have more levies, they would do that.
So, I mean, it's the same terminology, the cities,
counties, schools, it's a structural deficit where the
revenues that are coming in from all the different sources
do not match the rising costs and the demand for the
services from the public.
And, I mean, they're both going up, but just one's
going faster, a lot faster.
And so, and that's that, you know, they're going to hear
the word shortfall again.
They're talking about multibillion-dollar shortfall.
But it's really the gap between how much we're getting and
how much we feel like we need to spend or we need to
maintain what we're doing now.
And I don't know if there's any solutions.
or this whole issue of the income tax and the revenue,
that's a couple years off.
Even if that happens and the lawsuits fail and all,
the amount of money it brings in will just cover the cost
of maintaining the budget they just passed.
So there's no real new dollars going to be put into
the system from that tax and not quantitatively
large new numbers.
So they're in a cycle of trying to figure it out.
Former Governor Gregoire told the Association of Washington
Business just a few days ago at their conference that Democrats
need to kind of like take a break and figure out, you know,
they need to resize their dreams with the amount of revenue
they have to fulfill them.
-Yeah, and AWB recently put out a poll, too, about
businesses wanting to leave the state and things of that
nature, which could have an impact on taxes, too.
I don't know if I buy the people and the businesses leaving.
some go, some come.
I don't know, but i think people like it here.
They're going to make it try to make it work.
The problem is... - Yeah, you drove all the way
up from Olympia to get here.
-I saw them all on the roads.
They're all heading to work.
but if you look at the income tax, all the components of it,
they raised taxes last year.
Now they're going to get rid of them and replace them.
That's the kind of instability that Moody's is looking at and
saying, hey, we're not sure if you have a long-term vision
of how you're going to finance your government,
and that's why we're getting a little bit
nervous. -All right.
Thank you for that.
David, let me jump to you because
there's a question I want to talk about with regard
to expanding homeless shelters.
The mayor and council are working
on this this summer.
The mayor wants 1,000 new
units in the first year of her term.
The council is going along with this idea for the
most part, but this is a program that would include wraparound
services and could carry some serious costs in
the middle of a budget year-wide deficit is
definitely already looming on the horizon.
I know Erica was touching on this
earlier, trying to make something sustainable here.
Can the city stand up these shelters
quickly, for one, and keep them standing into
the future?
-That's the multi-million dollar question,
I suppose.
You know, I think the approach that they're taking
right now is kind of a proof of concept to the, you know, when
you press the mayor's office on how are you going to fund
this program, which would be significant, because it's
one thing to spend the money to stand up this shelter, but
to a T, everyone has said that they want, as you mentioned,
wraparound services, pretty intense resources
put towards these.
So it's not just the cost of standing them up.
It's the cost of running them and maintaining them, and that
is going to be significant going forward.
And when you press the mayor's
office about this, their argument is, you know,
we have this kind of initial investment.
It's around $17 million to
get this first round of shelter up and running.
And our hope is that it is going to prove so
wildly successful and so appealing that the council
will look at this and basically feel that they
have no choice but to fund and to continue funding this.
It's easier said than done.
We're looking at structural deficit, $150 million this year,
probably about the same next year,
unless something pretty dramatic changes.
So, you know, Mayor Katie Wilson has talked
about capital gains tax, other sort of, quote,
progressive revenue, however you want to define that.
That is probably not going to solve any short-term issues
or provide significant new funding for shelter
because it's there's probably gonna be litigation
administrative costs years to make not even sure how much
a capital gains tax for example would bring in so
if if the goal is to fund at a significant
level something like the ongoing operations of a
thousand shelter beds that will require prioritization
that will require moving money from one place to the
other cutting some things
coming up with some interesting budgetary tricks that I
haven't learned about yet.
-You're going to ask the state for something.
-Yeah, right.
It's always one of the first tricks.
Ask the state for money.
Okay, yeah.
-Another levy, who knows?
-Yeah, yeah.
-So it'll be tricky.
-Yeah, and Erica, you wrote recently about this.
This is a big project, and I think it's led to some
tension, from what I understand from some of your writing,
between the mayor and the council.
Can you talk about what's going on behind the scenes
and, I guess, where this project is going to go?
-Yeah, I mean, I think the tension that already existed
between the mayor and the council really came out into
the open with this because, you know, they sent down,
the mayor's office sent down legislation, didn't
have a sponsor, didn't have committees for any of these
three bills to go into, just kind of didn't work with
the council at all initially.
AND, YOU KNOW, AND THERE WAS -- AND PEOPLE CAN READ ABOUT
THIS IN PubliCola, BUT THERE WAS A BIG BLOW-UP OVER
THIS BEHIND THE SCENES LAST WEEK, I BELIEVE,
WHERE THE MAYOR'S OFFICE CALLED DOWN TO THE COUNCIL
AND SAID, "YOU NEED TO PULL THIS LEGISLATION BECAUSE I'M
NOT HAPPY WITH SOME OF THESE AMENDMENTS."
NOW, THAT'S NOT HOW THE LEGISLATIVE PROCESS
TYPICALLY WORKS.
AND SO I THINK THE COUNCIL WAS FEELING THAT THEY HAD BEEN
KIND OF ORDERED AROUND BY A separate branch of government.
And I think this will, you know, be an issue, not just with this
legislation, but, you know, in the future if they
don't sort of address this tension.
But, you know, as far as the shelter
units, I mean, you know, as David said, I mean, it's
going to cost quite a bit of money.
And so there needs to be, I mean, the
council approves the budget.
So there needs to be a good relationship between the
second and the seventh floor for that to happen.
And that's definitely not the case
right now.
-Okay, thank you.
Jerry, I'm gonna try to go speed round if I can
here. Back on elections here.
So we've got former Seattle City Councilmember
Kshama Sawant going against longtime US Congressman
Adam Smith for the District 9 seat there.
Covers from Seattle down to Federal Way.
Smith is way ahead on fundraising.
I just wanted to ask how real do you think the
challenge is from Kshama Sawant?
-I mean I don't think she unseats him but I think
I think she puts issues out there that forces him to
think about how he legislates from Washington, D.C.
And did look at the finances.
She is spending almost every dollar she gets, and
that's a difficult pace to spend what comes in.
But she raises the bar in the conversation to issues
that he's not talking about necessarily to start off with.
-Yeah, some things, war in Israel for certain,
all that type of thing?
-Yeah, I just don't know if there's enough voters in that
district that will agree with her on some of these points.
But to cast a vote for her will be difficult for many.
-Okay, thank you.
Erica, I know you've been reporting on some tough times
ahead for Sound Transit, which recently announced is
deferring or postponing or whatever you want to call it.
-Don't say deferring.
-Okay, okay, all right, sorry.
Postponing. How about that?
Yeah, sorry.
We're talking about the building of this Ballard
extension that was promised to voters with the Sound
Transit 3 measure 10 years ago.
So the agency is trying to close this $34.5
billion budget shortfall.
How did we get here?
What does the way out look
like? What do you think?
-Well, how we got here is, you know, sort of the same issue
that we've been discussing.
I mean, things just got more expensive.
There were some—I mean, just labor is more
expensive, materials are more expensive, there
are overruns.
And so the question now is, you know, how do they come
up with ways to cut costs?
And then, you know, what can they defer?
They do not like the word "defer," because it
implies—it implies what is actually happening,
which is that they're cutting the Ballard line for now
until more money can be found.
And the Ballard line, as Dan Strauss said, it's
the downtown tunnel.
I mean, it stops at Seattle Center.
It doesn't go anywhere near Ballard.
And so I think it's a real problem.
We approved the Ballard to West Seattle light rail line.
It's going sort of into West Seattle, not very deep, and
not going to Ballard at all.
And I think that it's very strange to me that politicians
other than Dan Strauss have not been complaining
about this more loudly.
I mean, politicians in Seattle in particular.
-Yeah, Dan Strauss, the Seattle City Council member
who represents that area there.
David, I wanted to make sure I picked up on a story
you did recently about World Cup matches coming to Seattle.
You've been living under a rock news flash here.
Seattle is scheduled to host a number of World Cup matches
between mid-June and early July.
How much is the city spending on this?
What is the return on that investment going to be?
I've seen a few headlines that might indicate
we're going to get fewer crowds.
Can you talk about this?
-Yeah, the city's putting something like $30, $32
million toward the event.
A lot of that is from grants, federal and state grants.
So it's not really coming directly out
of the city's coffers.
-It was $14 million from the city itself.
-Yeah, something more like $14 million, which, you know, the
calculation is that that will pay for itself, that the cost
benefit there is worth it.
It's it is always very hard for me to kind of wrap
my head around tourism agencies and their promises
of economic benefit.
We see this a lot when we're talking about convention
centers or baseball stadiums or, you know,
whatever the thing might be that it's going to bring
in trillions of dollars of new activity and save the
city, it's always hard to fact check that a little bit.
That said, it is also very true that there is going to be a
surge of activity in Seattle.
These are going to be significant events.
A lot of people are going to come here and a lot of people
are going to spend money here.
So compared to baseline, I think the activity
will be much higher.
And the calculation is $14 million, which is split
out over two budget cycles.
That's 2025 and 2026.
-Right, right, right.
-Is in the grand scheme of things, not that much to
spend to prepare for an event of this magnitude.
And that will be worth it for the city to do.
-Fair enough. Jerry, time to wrap up.
And I'll try to do the 30-second version if I can.
A headline that we missed.
I know we have a ton of state legislative races going on.
Supreme Court, too.
What do you got on your mind?
-It’s not state level.
These guys might be into it.
The charter review commissions in cities and counties, they're
debating some interesting topics around the state,
some in one place in Snohomish County debating
not allowing folks on city council of Everett to also
serve in the legislature.
They had a member recently.
So I would watch those for local issues, making some
changes in local governments.
-Very interesting.
-How about Erica?
What do you have on your mind?
What's going on?
-Well, I'm going to be following the budget, obviously, late
summer and into the fall.
-Like you do.
-City Council and mayor are talking about doing a fire
district to move some of it.
So it would be a separate levy type structure.
-Kind of like the park district.
-To move some of the funding for the fire department,
which costs $350 million or so, out of the regular budget.
That would close the deficit, but it would put another
basic service onto the ballot and into the hands of voters.
So it's risky, and it would be an additional property tax.
-We'll see what happens there.
David, help us wrap up some final thoughts about a
story you might be tracking over the next few months.
-Yeah, you know, I've written about this, and Erica has
written about this, you know, the mandatory housing
affordability program, whether that continues on
as it exists right now, which is the basically
fee that developers pay
into an affordable housing pot.
There's a push to roll back that fee significantly.
I think boosters or supporters of rolling back the fee
would like to see that legislated this year,
which would mean that they need to get it before the council
several months before its August recess,
which is pretty soon.
So if they are going to have any traction on that push,
I think we would need to see that, you know,
in the next few weeks or months.
So I'll be watching to see if that goes anywhere.
-Great. Thanks for that.
And we will be right back.
What are people saying online about the big stories
of the summer?
One person writes,
Another says,
We'd like to know what you think.
Email us at contact@seattlechannel.org
or find us on social media.
Great to get that input, and a big thanks to David
Kroman of The Seattle Times, Jerry Cornfield of The
Washington State Standard, and Erica C.
Barnett from Publicola.
Really appreciate you being here.
-Thank you.
-And also really appreciate Susan Han.
She is retiring after 19 years at The Seattle Channel.
I worked with her for 15 of those years, and she's the best.
She's a great friend and a consummate professional.
I'm going to miss you deeply.
I know that.
A lot of people here at this table love you, too, and The
Seattle Channel is going to miss you, too.
Thank you Susan.
We'll see you next time.
♪ ♪