Property taxpayers would foot the bill for $930M transportation levy

Property owners will bear the entire $930 million cost of the Move Seattle transportation measure if voters approve it this fall, City Council members decided Tuesday.

They voted 7-2 in committee to reject Councilmember Nick Licata’s proposal to cut the property levy to $600 million and collect $230 million through higher parking taxes and an employer head tax, leaving the city to trim its wish list by $100 million. Councilmember Kshama Sawant sided with Licata.

So the nine-year levy will go to the November ballot at a predicted cost of $275 per year on a $450,000 home, compared with $130 under the existing 2006 Bridging the Gap levy. In many cases, costs will trickle down to renters.

However, Tom Rasmussen, chairman of the Select Committee on Transportation Funding, said he’s heard no public outcry to change the tax mix, except from activist groups like the Seattle Transit Riders Union.

Licata warned that the higher the levy, the higher the risk it loses — which would force the Seattle Department of Transportation to go without levy money for at least a year, until another election. Bridging the Gap, which provides about $41 million of the $429 million SDOT budget this year, expires at the end of 2015.

“We’re missing a very good opportunity to demonstrate to the public we’re committed to keeping this city affordable for everybody,” Licata said.

Washington state’s tax structure has been ranked as the most “regressive” in the nation. Lower-income workers pay 17 percent of income for state and local taxes, and the rich just over 2 percent. State school funding and local transit agencies rely mainly on sales taxes.

Sawant chided the majority for griping about the state government’s tax structure, while skipping a chance to enact progressive taxes in Seattle.

The losing amendment would have charged employers $18 per worker per year, and boosted the 12.5 percent tax in commercial lots to 17.5 percent. A common argument for the parking tax is that it makes suburban or visiting drivers contribute to Seattle streets they use.

“What stars are you waiting on to align?” Sawant asked.

Mayor Ed Murray has said the city may need a head tax or parking taxes later, to pay off construction bonds for big projects, including bridges. Move Seattle replaces just one bridge, an old timber-supported span on lower Fairview Avenue North.

Councilmember Bruce Harrell said he agrees with progressive taxes and spreading the burden beyond property owners — but for now, “the vast majority of the community support is for the primary package that is before us.”

Rasmussen mentioned he commutes to a downtown gym about 6:15 a.m., “and many of the people who park in the surface parking lot are working men and women.” He said he worries about squeezing small businesses that are recovering from the recession.

Licata questioned the majority’s logic that parking and employer taxes are bad for business this year, yet elected officials need to keep the option available for later.

“If it’s bad, it’s going to be bad later,” he said.

A final City Council vote, to forward the levy to the ballot, is scheduled Monday.