Money

(Editor's note: This article appears originally in council member Nick Licata's Urban Politics newsletter.)

Sometimes it's the little things that make me glad to be a public servant.

It was approaching eight o'clock in the evening at the (Seattle) City Council's budget hearing. What once was a chamber packed with more than 200 people, now held fewer than a dozen. We were closing in on three hours of citizens pleading their cases.

We, as council members, were trying to figure out how to cut more than $20 million from this year's budget; one that had already been approved. We would be taking things away from people. Which constituency would receive cuts? Our youth, our elderly, our disabled, our neglected neighborhoods, our over taxed local businesses?

One of the last citizens to approach the podium was Tammara Stroud, a Queen Anne resident who had not come as a member of any group, but rather as a lone citizen. With a slight look of befuddlement, she spoke briefly.  In a rather matter-of-fact manner, she posed a question to us.

The full Seattle City Council will hear from several panelists what the impact is of the economic recession on Seattle’s small businesses and potential
steps the council can take to keep small businesses stable.

The discussion will be held Monday, April 13, at 3:00 p.m. in Seattle City Hall Council Chambers, 600 4th Avenue, 2nd Floor.

The panelists include: Nancy Porzio, executive director of the Seattle Small Business Association, Theresa Lord Hugel of the University District Chamber of Commerce, Jose Gaitan of the Seattle Chamber of Commerce Urban Enterprise Center, UPS Store owner Teferi Gebretsadik, and Pete Hanning, co-owner of the Red Door Ale House and co-facilitator for Government Affairs of the Washington State Restaurant Association.

According to a release from the city, the discussion is a part of the city council Economic Recovery Strategy Committee’s on-going effort to understand the various effects of the recession on Seattle and identify actions that can assist in stabilizing the local economy.

Council meetings are cablecast live on Seattle Channel 21 and Webcast live on the council’s Web site here.  

Seattle-area industrial firms are alive and vibrant, including those in Ballard, and the city is committed to keeping them that way, according to the city.

Brian Surratt, manager of business and workforce development for the Office of Economic Development, presented early results of studies of the basic industrial firms and maritime industrial firms in the area at the April 8 Ballard District Council meeting.

The city studied the BINMIC (Ballard Interbay Northend Manufacturing & Industrial Center) and the Duwamish industrial areas from 2000 to 2007.

Surratt said the industrial sector has shown stability over that period in that job loss was less and recovery was greater than in the nonindustrial sector.

"It brings durability in our local economy that makes us less susceptible to these wild fluctuations in the economy," Suratt said.

According to the study, there were 96,000 industrial-sector jobs in 1995. That hit a low of 78,000 in 2004, but was back up to 82,000 in the time since.

(Editor's note: The following article appears originally in Seattle City Council President Richard Conlin's newsletter "Making it Work.")

Seattle is about to embark on a flurry of legislation to invest in economic recovery projects, beginning with new federal money, and including advancing city capital projects that voters approved in the 2008 Parks for All Levy.

The city has already received $15 million for the Spokane Street Viaduct project from the initial federal transportation package and $6 million for energy conservation investments. The city is currently taking bids on the Spokane Street projects and there’s a good chance that work will begin this year.

The city will also receive some $3.3 million in Community Development Block Grants for loans to small businesses and to build and remodel community facilities. The Jewish Family Services Food Bank, Bush Hotel Congregate Meal Facility, Pike Place Childcare and Preschool and Goodwill Teen Parent Home are all slated for support. We will also rehabilitate and repair seven senior housing buildings, a total of 216 units.

(Editor's note: The following was sent as an email from Sen. Jeanne Kohl-Welles to her constituents with a copy to this newspaper.)

As you likely know, I introduced an income tax bill last week, SB 6147, which would establish a 1 percent income tax on high income residents. I am sending this e-mail to you with some clarification relating to the bill’s provisions. 

Our state faces a historic revenue shortfall, the chorus for a state income tax is growing louder. Our state tax system is dependent on the sales tax. It is regressive, forcing the poorest in our communities to pay the most of their income in taxes, and structurally unsustainable as we become an ever-increasing global economy.

That is why I have introduced Senate Bill 6147 to implement a 1 percent income tax on incomes of over $500,000 annually for individuals, $1 million for spouses filing joint returns and $750,000 for single-income households.

The revenues collected from this tax must be deposited in the Education Enrichment Account, created under this measure, to be used in support of the state’s public schools, colleges and universities.

Citizens will better understand where their tax dollars are being spent under a budget transparency ordinance unanimously adopted today by the Metropolitan King County Council that requires a dramatically greater level of detail in the presentation and reporting of the annual county budget, according to a release from King County.

“Budget transparency is critical, especially in times of deep fiscal challenges,"said Council member Bob Ferguson, chair of the committee of the whole and prime sponsor of the ordinance. "Policy makers and citizens need to know where every dollar is going. This legislation provides the public with a greater level of detail about county spending and ensures that citizens’ priorities are being met.”

“Transparency has the effect of holding policy makers accountable,” said ordinance co-sponsor council member Reagan Dunn. “If people can see what their money is spent on, they have more faith in their government. That is something that is surely lacking among our citizens at this time.”

Pending sales around Western Washington for the month of March reached the highest level in six months, according to the latest figures from Northwest Multiple Listing Service.

Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25 percent, rising from 4,559 transactions to 5,701. Last month’s volume was down 5.6 percent when compared to a year ago, but it was the highest monthly total since September when brokers reported 5,982 pending sales.

Inventory fell sharply from a year ago (down more than 14 percent), in part due to fewer new listings being added to the supply, according to the listing service. Member brokers added 10,252 new listings during March, compared with 13,274 for the same month a year ago, for a drop of nearly 23 percent.

At month-end, there were 39,825 active listings of single family homes and condominiums in the listing service database, a decline of 14.1 percent from the year-ago total of 46,358 listings. The total includes 33,083 single family homes and 6,742 condominiums in 19 counties.

A new revenue forecast for the city reflects the nation’s worsening economy, projecting $29.5 million less revenue in the city’s general fund for 2009, compared to last year’s forecast, a 3.7 percent drop.

“We have anticipated that revenues would be down and this latest forecast confirms the size of the problem," said Mayor Greg Nickels in a release issued today. "As we make difficult budget cuts, I will continue to put a priority on maintaining funding for public safety and direct human services."

The latest forecast revises estimates made in November 2008, adjusting for what has become a major recession nationwide and a severe regional downturn. Led by a decline in revenue from sales taxes and business and occupation taxes, the revised forecast for 2009 represents a 3.7 percent drop, according to the mayor's office.

This month, the mayor will consult with city council members on cuts that can be implemented beginning in May to bring the 2009 budget into balance. In anticipation of the lower revenue forecast, in February the mayor directed city departments to identify potential 2009 general fund reductions of up to 3 percent.

Last week, I wrote about the cuts our state budget is facing and that we would be releasing our Senate budget proposal sometime this week, and the House would release its proposal shortly after that.

I have learned in my years down in Olympia that everything during our legislative sessions is subject to change, and our budget roll-out has proven to be no different. As I told you last week, our latest revenue forecast reduced our expected tax collections by another $500 million. With this news, we needed just a little bit more time balance our budget – now facing a $9 billion shortfall.

Our operating budget will now be released to the public Monday at 10:30 a.m. That afternoon at 3:30 p.m., the Senate Ways and Means Committee will hold a hearing on the proposed budget in Senate Hearing Room 4 in the John A. Cherberg building. The hearing will continue on Tuesday at 5:30 p.m. in the same location if more time is needed to hear public testimony.

We are now finishing the 16th month of the recession, which began in December 2007, according to the National Bureau of Economic Research. Not only is this a long recession, but it’s also a severe one, marked by painfully high levels of job losses, a sharply reduced credit flow and a drop in the value of many investments.

Still, despite all the bad news, there are valid reasons to believe that brighter days lie ahead. But you don’t have to wait for things to turn around before taking steps to help your own financial future.

Here are some actions to consider:

Don’t cut back on your 401(k).