McCleary, State Budget, Housing Costs and Wallyhood

The state passed its annual budget on June 30 averting a government shutdown by a few hours.  The budget took so long to negotiate because of the court-mandated need to address the McLeary decision.  McCleary will be partially addressed by increasing property taxes state wide and reduce local levies statewide.  Part of the budget negotiations included a 40% reduction in business and occupancy (B&O) taxes for roughly 10,000 manufacturing business in the state.  At a very high level, the solution called for higher property taxes offset by lower local levies and lower B&O taxes.  Governor Inslee then vetoed the B&O tax reduction. Many State Republican legislators have stated the veto violated the budget agreement and will make any future negotiations with Inslee very difficult to impossible.  The veto appears to have played an integral part in a failure to pass the capital budget.  The operating budget is separate from the capital budget, and McCleary required funding from both budgets to meet expectations.  This is a cursory overview.  Commenters below please add more, relevant specifics.

What does all this mean for Wallyhood?  Damned if I know, but others have put together some ideas.

The capital budget part is fairly straightforward.  The capital budget is roughly $4 billion dollars.  From the Office of Financial Management:

The House committee primarily responsible for the capital budget is the Capital Budget Committee. The capital budget includes appropriations for a broad range of construction and repair projects involving: state office buildings; colleges and universities; prisons and juvenile rehabilitation facilities; parks and recreational facilities; K-12 schools;  affordable housing for low-income persons and people with special needs; water quality, water supply, and flood risk reduction infrastructure; and other capital facilities and programs.

The Burke Museum will likely stay in construction for a few years. No new school construction, even though the McCleary solution required construction.  The secondary effects could also be consequential such as reductions in forest management.  On a truly Wallyhood level scale, it looks like the only capital project in the neighborhood was $50,000 to partially fund clean up of a leaking tank near 45th and Stone Way.

The impact of the property tax swap for local levies appears very difficult to model.   The Bellingham Herald and The Olympian have done some useful analysis.  From that analysis, everyone in the state will pay higher taxes in 2018.  In later years, there will be areas that pay relatively less and areas that pay relatively more.  From all measures, we in Wallyhood will pay more than we have in the past, and relatively more than others.  We will be net contributors to the state’s solution to education inequality required by McCleary, and we will pay for it based on our property’s value.

Now comes the exciting part.  Is that correct?  Should we continue to fund everything in the state by property taxes?  Seattle City Council unanimously passed an income tax on high income earners that seems destined to face many court decisions before it is enacted.  Should income tax pay a role in the solution, and if so should Seattle lead the way?   Danny Westneat has an opinion.

Finally, where are you putting your political energy?  At the federal level, the state level, the city level, the neighborhood level?  A little energy at all levels, or focusing all your energy at one level?  Or are you following specific issues all along the political spectrum?

My opinion: I think my lay person eyes have the most marginal impact where the fewest eyes are watching.  That would be the most local level of the neighborhood.  Many people have dedicated their lives to watching the federal level, and I can support those individuals with donations.  Very few people can afford similarly to dedicate their professional careers to watching our neighborhood.  That leaves it up to us lay people.

Comments please.