Budget discussion: first impressions

The Council has finished its first round of discussions on the budget. Time for some Monday-evening quarterbacking.

The discussions happened in a series of meetings last week and today. For each department, the Council’s staff led them through issues as well as a list of Council members’ proposals for modifying the budget.  Here are the memos spelling out the issues and proposals:

• Office of Economic Development
• Department of Education and Early Learning
• Office of Labor Standards
• Seattle Police Department
• Seattle Public Utilities
• Department of Neighborhoods
• Department of Construction and Inspections
• Human Services Department
• Department of Transportation
• Department of Parks and Recreation
• Everything else

As always, you can find videos of the meetings on the Seattle Channel.

Up to now, it’s been the easy part of the process: picking through the Mayor’s budget proposal, and proposing things to change or add (mostly add). Any Council member could unilaterally propose anything. But over the next week, Budget chair Tim Burgess will be playing shuttle diplomacy among the Council members to ascertain which of the proposed changes have consensus support and try to massage them into a “balancing package.” The emphasis is on balancing — all the changes made will need to still result in a balanced budget.  That will result in leaving dozens of proposals on the cutting room floor: there were tens of millions of dollars in proposals for additional spending, but far less new revenues.

Then the Council will have its second round of discussions, in which the bar is set higher: any proposals for further changes (or second runs at proposals that didn’t make the first cut) will require three Council member co-sponsors, and will need to offset any additional spending with either new revenues or cuts to spending elsewhere to maintain the balanced budget. After those discussions, the Council will vote on each individual change, and then take one final vote to approve the complete budget.

The first round of discussion provides an interesting view of the Council members’ priorities. Here are my impressions so far.

• The switch to seven district-based positions this year had a clear, though not dramatic, effect. All seven district representatives pitched budget additions to benefit their district, but none of them were solely focused on it. And as expected, Council member Juarez was the most vocal advocate for her district. You could call this “faithfully representing their districts,” or you could call it “earmarks.” Even if it’s earmarks, that isn’t necessarily a bad thing so long as they are good projects. But it will be interesting to see whether there is horse-trading between Council members in the next round to build sufficient support for pet projects.
• Most of the Council members used the budgets discussions to drive their legislative agenda, often closely related to their committees’ responsibilities:
  • Sawant: affordable housing, “ordinary workers,” taxing businesses, rent control, anti-business, anti-Pathways Home.
  • Burgess: early childhood education,  program evaluations, fiscal responsibility
  • Harrell: reforming the criminal justice system, under-represented minorities
  • Gonzalez: labor issues, public safety, police reform, support for immigrants and non-English speakers
  • O’Brien: environmental justice, homelessness, bicycles and pedestrians, backyard cottages
  • Juarez: parks and community centers
  • Bagshaw: human services
  • Johnson: “family friendly” city

The one exception is Council member Herbold, who was simply prolific, creating dozens of proposed changes across the board.

• The ghosts of past decisions are coming back to haunt the Council:
  • The Council seems to have lost its enthusiasm for bike-share, having discovered that after a controversial and expensive bailout of Pronto last spring, it has continued to shed customers and lose money, and the existing infrastructure and bikes will likely be abandoned by the new operator in favor of new electric-assist bicycles.  Burgess and Herbold, still bike-share’s fiercest critics, proposed extreme restrictions on future spending.
  • The march to the $15 minimum wage is putting the squeeze on non-profits, including human service providers under contract to the city and state. Sawant proposed spending $11 million to mitigate the gap between what the organizations can afford to pay their employees under their current contracts and what they are legally required to pay under the minimum wage law. O’Brien also proposed adding resources to lobby Olympia to do the same thing for their contractors.
  • The Seattle Preschool Program is planned to continue growing in the coming years, but the city’s public schools are bursting at the seams and are pushing out preschool classrooms (and before- and after-school care programs). It’s challenging to find locations for the existing preschool classrooms, let alone the new ones that are supposed to come online.
  • With the recent spate of new labor and tenant-protection ordinances, both the Department of Construction and Inspections and the Office of Labor Standards need to staff up their enforcement capacity.
• The homeless response is a mess. Both the Pathways Home plan, and the “interim” plan, were released too close to the budget process. Both are complex and expensive, and neither have been thoroughly vetted by the Council. The inevitable result is a list of proposed changes to both plans in the budget to address the concerns of individual Council members. Sawant, the most vocal critic, proposed removing all of the resources for planning the implementation of Pathways Home. Others made one-off proposals to add or enhance components of the interim plan, or to add back in programs expected to get cut under Pathways Home due to shifting priorities. But none of this is helping to build a consensus around the homeless response.
• The human-service providers are running the show. This is something that the Focus and Poppe reports pointed out as a flaw of the current homeless response, though it’s more broadly true of the portfolio of human services funded by HSD.  Poppe called out both HSD and All Home for allowing providers — the ones receiving the money — far too much control over the process of deciding what gets funded. HSD responded in Pathways Home by switching to an RFP-based system starting next summer for all homeless response funding, but the providers — and their fans on the Council — are already pushing back. For starters, transitional housing providers protested loudly when HSD proposed cutting expensive, low-performing programs (but not all TH programs as was reported). Sawant is now inaccurately calling Pathways home a “one size fits all” plan because of its increased investment in rapid rehousing at the expense of the lowest-performing TH programs. Actually, it’s the federal McKinney-Vento grant program that’s generally shifting away from transitional housing, and Council members are now proposing that the city budget backfill lost federal funding for those programs.  Where this gets particularly eyebrow-raising, though, is when the providers collectively assert their influence over the Council to explicitly fund their own programs, such as when the Seattle Human Services Coalition delivers its own budget recommendation portfolio to the Council, which (surprise!) recommends funding its members’ programs. And Sawant proposed funding the entire set of recommendations, while other Council members proposed funding individual ones.  The HSC and its member organizations are doing good work in the community, but having this kind of provider-driven system means that no one is asking which providers deliver the most impact and the highest performance. There is an ongoing tension between HSD’s desire for a funder-driven system and the Council’s desire for a provider-driven system, and this week the providers are winning. There is a strong argument for taking advantage of the providers’ unique insights into the problems of delivering services, but an effective city government takes a critical look at their input to ensure that it’s not self-serving.
• The Council members are getting creative in their search for additional revenues. Council member Herbold proposed making the Office of Labor Standards fee-supported, with a new regulatory fee imposed on businesses based upon their size. Sawant pitched a sizable increase to the commercial parking tax. She also proposed eliminating a special reduced B&O tax rate for “international investment management services” that was established in 2009 to lure a company to Seattle. And O’Brien wants to staff up the Office of Intergovernmental Relations to more aggressively go after federal and state matching funds for Move Seattle projects.

Tuesday evening at 5:30, the City Council will hold a public hearing on the budget, open to everyone who wants to share their thoughts with the Council members.