Proposed King County budget includes new sales tax for housing, 450 job losses

King County Executive Dow Constantine proposed a new 0.1% sales tax Tuesday to fund housing for people who are chronically homeless, part of a two-year budget that would also see the county eliminate 450 jobs as tax revenues have plunged because of the coronavirus pandemic.

The new sales tax, Constantine said, would fund $400 million in facilities, enough to house about 2,000 people who have been living without permanent housing for at least a year, and other behavioral health supports.

The plan, which would require approval from the state Legislature, would be to buy distressed motels, hotels, nursing homes and similar facilities and use them to offer permanent housing, with services, Constantine said.

“Our neighbors, friends, and family members in housing distress cannot wait. This is the right thing to do, and we need to do it now,” Constantine said. He bemoaned Washington state’s tax system, perhaps the most regressive in the nation, which leaves counties few options for raising revenues. “The fact that Washington has a terrible tax system does not change the hard truth, there is nothing more regressive than homelessness.”

Constantine presented his two-year budget to the Metropolitan King County Council on Tuesday, calling for the county to cut 450 jobs across departments as it struggles with the economic downturn.

The County Council will consider Constantine’s proposals and either alter or approve them by mid-November.

His office said that about 50 layoffs will be required, as the other job losses will happen through attrition or voluntary buyouts for retirement-eligible employees.

Alison Eisinger, executive director of the Seattle/King County Coalition on Homelessness, praised Constantine and described the proposed sales tax housing plan as “major.”

“It doesn’t have to be perfect for us to say that it’s damn good,” Eisinger said. “We need significant, scaled-up answers, and bringing 2,000 people into homes is bold. It’s necessary. It’s also not sufficient, but it’s something that we’re going to work with coalition members all across King County to bring into being.”

While the budgets of virtually all cities, counties and states have been hit hard by the pandemic-induced downturn, King County is in relatively better shape than some. That’s because much of the county’s revenue comes from property taxes, a more stable revenue source than the sales and business taxes that the city of Seattle largely relies on.

But parts of King County’s budget funded by the sales tax — including bus service and mental health programming — could face stark cuts.

King County Metro Transit, which relies heavily on sales tax to fund bus service, would see about 200 job losses. Metro has also gone without fare revenues since fares were suspended at the beginning of the pandemic.

A sharp downtick in sales tax revenue also puts pressure on the wide array of behavioral health programming funded by the King County Mental Illness and Drug Dependency (MIDD) 0.1% sales tax. Constantine has proposed an $8.7 million cut to non-Medicaid behavioral health services in King County, including transitional care for people exiting psychiatric hospitals and homeless outreach, unless the new, proposed sales tax can be implemented.

The county already cut $12 million from programs funded by the MIDD earlier this year as sales tax revenues shrunk. Some of the largest cuts were to programs that had underspent funding or were aimed at diverting mental health issues from the criminal justice system, including crisis intervention training for police officers.

The question the county had to ask was “would we rather cut services to people or reduce trainings to service providers,” said Leo Flor, director of the Department of Community and Health Services, in an early September interview.

“We decided we would prioritize people getting direct services in the community,” Flor said.

The county, this year, has boosted spending by about $260 million to buy protective equipment, run coronavirus testing centers, build COVID isolation facilities and provide economic aid to those who have lost work because of the virus. The county, since the start of the pandemic, has also turned vacant hotels into homeless shelters, in Seattle, Bellevue, Issaquah, Renton, SeaTac and Kent.

Almost all of that money for these measures came from the federal government, but it is due to run out at the end of the year.

The county’s continued efforts to fight the virus — through contact tracing, rapid testing and other means — depend on Congress passing another round of economic aid for state and local governments. U.S. House Democrats passed a $3 trillion aid bill in May, but the Republican-led Senate has not acted on it and has not passed an aid bill of its own.

Constantine is requesting $4.2 million from the county’s rainy day fund so that the hotels-turned-shelters can continue to operate in January, if more federal aid is not approved by then.

He blamed “the ineptitude and indifference of a Senate majority and president who refuse to help local governments in this moment of crisis.”

The proposed budget cuts $4.6 million in marijuana tax revenue money from the county sheriff’s office and uses some of it to help people vacate old marijuana convictions, one of several steps, along with funding community justice programs, that go toward the county’s efforts to combat racism, Constantine said.

Constantine said the cuts to the sheriff’s office were driven by revenue declines and that the sheriff’s office itself had proposed the specific cuts.

But County Councilmember Reagan Dunn called the proposed cuts “a dangerous approach to public safety.”

“This proposed budget neglects what is possibly the most important and basic job of government: to provide for the safety of our residents who rely on law enforcement during times of crisis,” Dunn said.

Councilmember Jeanne Kohl-Welles, the council’s budget chair, called the budget “thorough, thoughtful and reflective of the truly unprecedented situation our county has been and is still facing.”

The budget also includes new investments in unincorporated areas: $10 million for a community center in Skyway; new building projects in Skyway and White Center; and $24 million for open space conservation.

The county’s initiative to house people who are chronically homeless follows a similar strategy in Seattle, where officials recently announced they would build 599 units of permanent supportive housing for the same population.

Homeless advocates and business leaders calling themselves the Third Door Coalition have been urging Seattle and King County officials to address chronic homelessness with supportive housing as visible street homelessness has frustrated businesses and residents across the city.

County homelessness data estimates between 3,355 and 4,500 people are chronically homeless in King County, the majority of them living unsheltered. The Third Door Coalition puts that figure much higher, at 6,500.

A May proposal from the coalition argued that the city and county could end chronic homelessness in five years by creating 6,500 units of housing with wraparound social services.

The projected units created by King County’s proposed sales tax would still fall short of that estimate.

Correction: A previous version of this story gave incorrect information about Dow Constantine’s comments on Washington’s tax system. He called Washington’s tax system terrible and unfair but did not mention an income tax.