Mayor McGinn Gets an Earful from the Business Community

Several months ago, writes the Seattle Chamber's Christine Donegan, Seattle employers issued a joint appeal to Mayor McGinn and City Council to avoid raising taxes to balance the 2010 and 2011 budgets. As a follow up, twenty-two business organizations have issued a letter to the mayor and council with specific suggestions for balancing the budget without negatively impacting employers or essential city services.

Mayor Mike McGinn, introducing The Maldives at Bumbershoot

Dear Mayor McGinn,

In April, over two dozen representatives of Seattle employers wrote to urge you to refrain from increasing existing taxes and proposing new taxes to balance the City’s 2010 and 2011 budgets. We believe that burdening employers with additional taxes will slow economic recovery in Seattle. As a follow up to that letter, we write to offer specific suggestions for balancing the City’s 2011 budget that will preserve jobs and critical City services.

As you are well aware, the City of Seattle faces a projected $67 million shortfall between planned expenditures and anticipated revenues in 2011, with $11 million less in revenues than previously predicted. However, the City is projected to collect more General Fund revenue in 2010 than was collected in 2009 and this trend is anticipated to continue through 2012.

Between the year 2001 and 2011, General Fund revenues will have grown by 45 percent, 18 percent when adjusting for inflation. The City’s budget shortfall is not driven by decreasing revenues, but rather as a result of expenses that are increasing at a rate greater than revenues and a rate greater than Seattle’s Consumer Price Index (CPI).

Given this important context, we believe ample opportunity exists to balance the budget without negatively impacting employers or core City services.

We commend you for the statement you made as a candidate last fall:

“I will work to cut city administrative costs before reducing direct services to citizens. By doing more with less, we can stretch tax dollars further.”

We applaud your commitment and believe this type of approach to budgeting is needed now more than ever.

As you finalize your 2011 budget proposal to the City Council, we urge the following:

1. Reform city policy to recoup a higher percentage of parking fines: As first reported by KIRO TV, the City of Seattle is owed $52 million in unpaid parking tickets. Unlike other cities, Seattle currently does not take aggressive steps to collect unpaidfines from individuals who have multiple unpaid tickets. We urge you to review and reform this policy.
2. Prioritize the Alaskan Way Viaduct and Seawall Replacement Program: Replacement of the vulnerable Elliott Bay Seawall and Alaskan Way Viaduct (and the associated projects outlined in the MOA between the State of Washington and the City) should be the City’s top capital budget priorities. Failure of the Seawall or the Viaduct would have catastrophic impacts on life and commerce in Seattle. The City should adopt a realistic financing plan for its obligations under the MOA before taking on new capital projects. Simply put, the foundation of the house is cracked and vulnerable, and must be fixed before we consider building additions to the house. The replacement of the Seawall should be funded principally through a city-wide tax source. The Seawall supports commerce, transportation and utilities critical to the entire city and the costs of replacement should be shared by all Seattle residents.
3. Prioritize public safety funding: It is critical that in this difficult economic environment, our neighborhood business districts are safe and welcoming so small businesses and retailers remain competitive in the region. Unfortunately, aggressive solicitation, drug trafficking and late-night violence are all-too-common occurrences. From the Chinatown International District to Belltown to the University District and the neighborhoods throughout Seattle, residents and business owners are calling for an improved police presence. Full implementation of the Neighborhood Policing Plan should be a top budget priority. We recommend identifying at least 20 non-essential positions within City government and redirecting the salary and benefit savings from these positions to hire new officers.
4. Increase the use of local companies to provide City services: The City should consider increased contracting with local businesses that could provide services at lower costs to taxpayers. In recent years, the City has contracted with a minority-owned, union shop to handle its printing needs. The shop prints City materials for less money, in less time and of superior quality than when it was printed in-house. Numerous operations and maintenance functions throughout the City could be performed by local companies at potentially lower costs.
5. Avoid expanded and new regulations: Expanded and new regulations increase costs and reduce productivity. Regulations and mandates have a cumulative impact that results in a disincentive for businesses to expand, and under excessive regulatory burden, businesses leave. We appreciate your commitment to identify existing City regulations that may have made sense when the economy was strong, but may be producing unintended consequences in today’s economic environment and stalling recovery.
6. Identify significant personnel savings: Numerous local private sector employers have reduced work schedules, staff levels, and frozen employee salaries and benefits. Several private sector unions have also recently agreed to freeze wages. The Associated General Contractors (AGC) of Washington--representing the commercial contractors in Western Washington--just negotiated a two year freeze of wages and benefits with the Carpenters, Cement Masons and Operating Engineers. This freeze impacts all commercial construction in Western Washington for the period June 1, 2010 to May 31, 2012. While the negotiations were difficult, the union leadership finally agreed that it was in the long term best interests of their members to accept the freeze. Their membership supported their decision. The Carpenters ratified the contract by an 83% vote. The Cement Masons’ ratified vote was 100% in favor, and the Operators’ vote was three to one in favor. These issues are currently being negotiated with the Laborers and the Teamsters.

In looking at personnel expenses for 2011, we believe the City should take similar aggressive steps to reduce costs, including but not limited to implementing employee furloughs and making reductions in mid-level management. We understand that efforts to gain agreement with organized labor to eliminate cost of living increases for 2011 have been unsuccessful. We find this very unfortunate and believe that City government should not ask Seattle residents who are unemployed to support pay increases for City employees during these challenging economic times. Nor should the City provide raises to employees at the expense of core City services.

We encourage you to give the aforementioned priorities the utmost consideration as you shape the City’s budget. We further believe that the City should engage citizens in a truly representative priorities of government process to gauge how people from all walks of life want the City to spend their tax dollars.

We recognize the difficult decisions you face. It is in the spirit of protecting core City services and jobs in Seattle that we offer this input.

Sincerely,

Jerry Dinndorf
Seattle District Manager, Associated General Contractors of Washington

Rod Kauffman
President, The Building Owners and Managers Association

Kate Joncas
President, Downtown Seattle Association

Jessica Vets
Executive Director, Fremont Chamber of Commerce

Mary Chapman
Director of Marketing, Greater Queen Anne Chamber of Commerce

Lawrence Pang
President, Greater Seattle Chinese Chamber of Commerce

Phil Bussey
President & CEO, Greater Seattle Chamber of Commerce

Teresa Lord Hugel
Executive Director, Greater University Chamber of Commerce

Larry Levine
President, Madison Valley Merchants Association

Sam Anderson
Executive Office, Master Builders Assoc. of King & Snohomish Counties

Rob Arron
President, NAIOP

Joe Quintana
Chair, Seattle Business Coalition

Tom Norwalk
President & CEO, Seattle’s Convention and Visitors Bureau

Russel Hokanson
CEO, Seattle-King County Realtors

Peter Philips
Seattle Marine Business Coalition

Michael Cleveland
South Lake Union Chamber of Commerce

Susannah Malarkey
Executive Director, Technology Alliance

Dr. Skip Rowland
Executive Director, Urban Enterprise Center

Chris Rivera
President, Washington Biotechnology & Biomedical Association

Anthony Anton
President, Washington Restaurant Association

Jan Teague
President & CEO, Washington Retail Association

Lewis McMurran
Dir. Public & Govt. Affairs, Washington Technology Industry Association