"Forever" tax is no more; city cuts levy to 9 years

Recognizing that even Seattle taxpayers have their limits, Mayor Greg Nickels and the City Council said Tuesday they plan to dramatically shrink a $1.6 billion package for local streets and bridges.

Rather than raise property taxes for 20 years, the levy that likely will appear on the Nov. 7 ballot will span nine years.

"We will pull the plug at nine years," Councilwoman Jan Drago said. "The package was just too big and too long. We made a decision to downsize rather than supersize it."

The initial plan called for the largest levy in city history, as well as new taxes on employees and parking lots. Critics complained that the levy could be permanent because the ballot language did not specify an end date. Business leaders were reluctant to support the package, and Mukilteo anti-tax activist Tim Eyman jumped into the fray, creating a campaign group called "Vote No on the Never-Ending Tax."

"The biggest criticism I heard was that [the property tax levy] would be there forever," said Nick Licata, council president. "The realization was we couldn't fight a sound bite."

The revised levy proposal is scheduled to go to the full council Sept. 22 as an expected replacement for the earlier proposal. Drago and Licata said they had enough votes to pass the new measure, which they're now calling Phase 1 of the 20-year plan.

The owner of a $400,000 home would still pay $155 in added property taxes in the first year of the levy, or 38 cents for every $1,000 of assessed value. But the levy would increase at a lower rate than the initial plan called for, and would raise a total of $365 million in its first nine years, as opposed to $1.1 billion over 20 years.

A downsized ballot measure


Mayor Greg Nickels and the City Council are cutting way back on the property tax they'll ask voters to approve Nov. 7. Instead of at least 20 years, the proposed levy would last nine years. Parking and employee taxes, which are part of the street and bridge-repair package, will go ahead as planned. They don't require voter approval.

Council members said they don't plan to alter the new parking and employee taxes. Those do not require voter approval and will start July 1, 2007 as planned. The 10 percent tax on parking in commercial lots would be phased in over three years.

The employee tax would charge Seattle firms $25 for every worker they employ. Businesses that gross less than $50,000 a year or employ fewer than three people would be exempt.

The parking and employee taxes would raise $180 million over nine years, bringing the new total package — with the levy — to $545 million.

Council members and mayoral aides said they backed the initial levy proposal because it was needed to eliminate an existing $500 million maintenance backlog, which would grow to $1 billion in 20 years if the city took no action.

The initial levy plan would have given city officials the ability to do something they couldn't under a fixed-term levy. Under state law, it would allow them to increase the levy rate by up to 5 percent annually during the first six years. Fixed-term levies like this new nine-year proposal are limited to 1 percent annual increases, which wouldn't keep pace with inflation in the construction industry.

"That was one of the attractive elements of the [initial] levy," said Nickels' aide Michael Mann. If approved, the new levy would raise 18 percent less by 2015 than the earlier proposal, Mann said.

Council members said they heard from constituents that the $1.6 billion proposal was flawed. The Greater Seattle Chamber of Commerce leaders said they probably would not campaign for it.

Licata said he knew the proposal was in trouble when he heard from neighbors who "generally support" city tax levies that they "just weren't there for this one."

Drago said city leaders weren't cowed by Eyman. "No, we don't listen to the guy from Mukilteo. We listen to the citizens of Seattle," she said.

Eyman said the news from Seattle City Hall was encouraging, but he wasn't giving up his fight. "The never-ending tax was imploding and now they're scrambling to try and salvage something. But the fundamental problem remains, and that is they're asking voters to pay twice for an essential basic government service — road maintenance."

Most of the money in both the initial and revised proposals would go toward basic maintenance, such as street paving and bridge repairs. The rest would be divided among bike and pedestrian safety, transit, landscaping, traffic signs and signals and a few major projects such as a reconfigured Mercer Street and a renovated King Street Station.

Nickels has said the city fell behind on maintenance because state funding for transportation has declined in recent years and state courts repealed a city street-utility fund. Eyman's tax-limiting initiatives have also hurt.

The city conducted a public opinion poll in May — before the plan was unveiled — which showed 62 percent of voters supporting a 20-year levy. But political leaders didn't anticipate the "never-ending tax" criticism.

"I'm pleased my colleagues finally saw the light," said Councilman Peter Steinbrueck, who opposed the initial plan along with David Della and Tom Rasmussen.

Bob Young: 206-464-2174 or byoung@seattletimes.com