The Port of Seattle may need a public vote for its share of the tunnel

Regardless of how the legal wrangling plays out this week over the proposed referendum on the tunnel, voters will likely get a chance to vote on a significant part of the funding for the deep bore tunnel. The Port of Seattle has pledged $300 million dollars to fund a part of the tunnel project but a quick review of the Port’s budget makes it clear that the Port doesn’t have the money to cover their share. That means they’ll likely have to go to voters for a property tax increase or to get voter approved debt—or both. That means a ballot measure to gives thumbs up or down to the Port’s share of tunnel funding.

The Port of Seattle’s entire annual operating budget is about $500 million dollars. About $73 million of that comes from property taxes levied on properties in King County. The taxing authority available to the Port is about $88 million, which means about $15 million dollars that the Port could allocate for tunnel funding. Anything above that would require a vote of voters in King County.

But what about all the other revenues the Port gets from aviation fees at SeaTac airport, for example. Much of that funding can’t be used for projects like the tunnel. In fact, many of the revenue streams that fund Port operations are conditioned, dedicated or limited funds. You can’t charge the airlines more to pay for the tunnel costs. So for all the money that pours into the Ports coffers, not all of it is usable for tunnel costs.

And here’s another interesting thing to note. The Port’s budget overview shows that it’s capital budget—the budget the Port uses for construction projects like the deep bore tunnel—will drop from $410 million last year to less than half that by 2014, about $195 million for capital expenditures. And there is no sign of the $300 million anywhere in the capital budget documents, although the Memorandum of Agreement does say that much of the Port’s contribution will come in 2016 and beyond. But from where?

Finally, it is possible that the Port could issue bonds, borrowing the money for the tunnel. But there too, the Port faces state limitations on how much it can borrow without going to the voters. It’s possible that the Port might be planning to issue bonds, but that means it cuts into their credit limit. And if their debt goes too high they’ll be force to put the bond issuance up to a vote of the people. Furthermore, that means they will have to pay interest on top of the $300 million they’ve committed to. And I can’t find mention of the tunnel anywhere in their financing plan.

All of this could explain why the Port—and supporters of the tunnel project in general—continues to be coy about where it’s $300 million share of tunnel expenses will come from. I’m no expert on the Port’s budget. Why don’t they just explain?

The bottom line is that the Port’s annual operating budget is $500 million. They’ve committed to putting 3/5 of their annual operating budget into the tunnel (not all at once, but when and how?). But they haven’t put that into their capital budget or given taxpayers a hint about where it’s going to come from. Just imagine if you put yourself on the hook for 3/5 of your annual income and didn’t tell your spouse or partner how you were planning to pay for it.

It looks like the Port just can’t afford to pay for their share without a vote. If that isn’t the case the Port should just clear this up by explaining where the $300 million will come from.

Photo credit: kakisky from morguefile.com

Recent surveys such as a Elway tunnel poll suggests that a 99 Tunnel vote could go either way. But there are some interesting takeaways.

In the poll, among all respondents, the elevated options combined (retrofit or rebuild) beat the tunnel 38% to

Photo courtesy of the city of Seattle

Of course, the poll didn’t explain the options or their benefits and drawbacks. It’s anyone’s guess how doing so might have affected the numbers. For example it didn’t suggest that most surface concepts involve more transit, and it didn’t include WSDOT Secretary Paula Hammond’s recent analysis that voting-related delays would cost $54,000,000 even if the tunnel wins, and $20,000,000 per month for any additional delay after the vote.

Here’s a theory. If greater tunnel support correlates to greater likelihood of voting, perhaps tunnel support also correlates to civic involvement and general knowledge as well. Maybe the majority of both groups are equally informed, but the tunnel opponents include a fair number of standard-issue angry uninformed people as well. These are the people who, anecdotally, still think the tunnel would be along the waterfront, or would require a viaduct closure to build, or would reduce capacity through Downtown. Or they think elevated is better than tunnels in earthquakes, etc. Simply correcting the basics would do a lot of good for the pro-tunnel side.

Surface supporters must be taking the poll like a ton of bricks. The numbers don’t suggest a majority for the tunnel, but they do say that a 73-21% majority prefer a grade-separated 99 (or 73-22% among “almost certain” voters). The idea that “Seattle will fight the state and say no” appears to be a pipe dream. Surface supporters are attempting to throw a wrench to kill the tunnel, but if they somehow succeed they’ll likely give us a taller, wider viaduct for the next 70 years. Or maybe a billion-dollar temporary retrofit followed by another replacement debate in 2030.

Around the same time came another poll suggesting a 28% approval rating for McGinn, with 24% of that being just “good” rather than “excellent.” The negatives were more extreme, with 27% “poor” and 39% “only fair.” Since McGinn is letting his tunnel opposition dominate his agenda, this suggests that voters are either disagree about the tunnel or want him to broaden his focus, or both.

Tunnel supporters have released their own EMC poll results. With wording that was substantially more positive for both sides than Elway’s version, they asked about a two-way vote between the tunnel and surface/transit, and 55-40% preferred the tunnel. Of course this sort of poll is always biased. Perhaps more influential was the voter preference for council members in the next elections — 39% would prefer a pro-tunnel candidate and 20% an anti-tunnel candidate, with 41% unaffected by the tunnel. That’s surprising, but conforms with the idea that tunnel opponents are generally not letting it dominate their opinions, or see the issue as largely settled.

As a tunnel supporter I’m hopeful and optimistic! Ideally the courts will throw out the referendum, and save us most of the $54,000,000 or whatever the number is. And I hope the Magnolia freeway supporter measure goes away. Either way, I hope the Council and State will continue to be leaders as they have been!

Digging a tunnel to replace the unsafe viaduct won't increase property tax revenue

The reasons why the tunnel won’t help Seattle’s tax base go back to what I wrote here a little while back in long drawn out piece on Tax Increment Financing. Even if the tunnel gets built, Washington’s budget based tax system doesn’t create additional tax revenue for the City no matter how much the project increases property values. In Washington State, annual property taxes are collected based on a city’s previous annual budget plus 1 percent, regardless of how high or low property values go.

The “Uniformity Clause” in the state constitution means Washington has a peculiar property tax system that doesn’t set a rate of taxation on property. In most places, like Oregon for example, where there is a set rate of taxation on property, infrastructure improvements can incrementally increase tax collections without raising rates by increasing the value of the property. A increase in property value with a 1 percent rate of taxation means more tax revenue.

But Washington doesn’t have a rate based property tax. So it is a false statement to say that the tunnel will help Seattle’s property tax base. Tax collections can only go up 1 percent. The tunnel won’t boost revenue from property taxes and neither will any other project that might improve property values. This is why TIF doesn’t work in Washington without a constitutional amendment.

Which takes us back to the point of the seminar. We agree on a lot of things. Amending the constitution to allow a rate based system for Tax Increment Financing is an idea both business and environmentalists can embrace. It would make a lot of sense to turn our energies and influence toward that end where there is pending legislation to make just such a change. Once we put the tunnel fight to rest, business and sustainability advocates need to turn our fire away from each other and toward Olympia.

Photo credit: jppi from morguefile.com

Census results, to some of us, are a like a very slowly breaking pinata. First we got the 2010 state totals. Lately we’ve been getting the local figures and their components. This has set the Nerdisphere on a protracted sugar rush while the media has been attempting to make sense of it all with varying success.

Some of the results were close to what was expected, such as the city of Seattle’s 8% growth rate for the decade…pretty impressive for infill in a place already occupied. Others were outright shocking to many. Either way, it’s important to remember some basics. 

First, the Census, while the “official” count, is not perfect. It’s a different methodology from the Census Department’s own annual estimates, but one fraught with its own pitfalls. When the cities of Chicago, Detroit, Atlanta, Houston, and New York each had counts six figures below what they expected based on estimates from the Census Department and local agencies, the estimates might have been way off, the count might have been way off, or both.

The estimates use imperfect assumptions and indicators to gauge trends. The Census attempts to count people who are often very difficult to count, or who actively try to avoid being counted. This will be more clear as analysts dig in, but anecdotally it seems like surprisingly low numbers were common in places with more language barriers, immigration issues, and/or poverty. We know that these factors correlated with lower mail-back rates for the basic form, and it’s a good bet that they also related to the ability to find a lot of people at all…even people that the estimates did catch by looking at trends such as housing.

Local governments will challenge results in some cases. They will probably fail to win major revisions, as in the past. I’m just guessing, but even very strong evidence will probably only achieve moral victories and not significantly revised official counts, because the bar will be extremely high. Another guess is that this is because courts have prioritized timely apportionment and districting over precise fairness.

The Census Department has done an impressive job with an astonishingly difficult task in many ways. Good PR effort and budget performance for example. But here’s a major criticism: the census.gov and 2010.census.gov websites are horrible. This is a major topic online…legions of tech-savvy nerds are trying to find information and failing, sometimes because it’s hidden, or only on the other site, and other times because it’s apparently not on either site at all. So aside from what’s in the basic press releases, the best information is generally from second parties who aggregate data. It’s appalling that an agency whose mission is to collect and share data could fail so utterly in one of its basic functions. Census Department, please hire some help, and consider qualifications!

Onward. A standard nerd debate has to do with municipal populations vs. broader city populations. The term “city” can refer an administrative district, but in the urban/demographics Nerdisphere, it usually means some variation of “entire developed area,” which is most similar to Urban Area (UA), Metropolitan Statistical Area (MSA), or “Combined Statistical Area” (CSA, for a city comprised of multiple MSAs). When Houston or Phoenix claim to be #4 or #6 in population among US cities, that gives us nerds fits. They’re talking about their central municipalities, i.e. subsets of the whole, which were drawn with wider-than-average boundaries. If Boston annexed a bunch of land tomorrow, would that make it a bigger city in any way that really matters?

Another suggestion is to use past tense. The Census says nothing about what “is.” Even if accurate, the count was a snapshot of 4/1/10.

Regarding what “is,” it’s interesting to wonder what’s happened since early 2010. In Seattle (the central municipality), we’ve already eaten up much of our vacancy rate. As some economic indicators and general hope have improved, we might be sharing housing a bit less. We’ve probably grown a little. You might also wonder what’ll happen in the coming years and decade, but that’s another story.

Dan Bertolet of hugeasscity and PubliCola fame has started a new blog called Citytank. Its mission is “to propagate ideas that help fulfill the promise of cities to both expand the human spirit, and sustain a thriving

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