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Commentary By Jacob L. Vigdor

Seattle’s Progressive Prescription for Rapid Urban Decay

Cities, Cities Housing, Tax & Budget

In 2017, then-Seattle Mayor Ed Murray vowed that his city would “shine a light and offer a different vision.” He envisioned a Seattle where all 4-year-olds attended preschool, where all high-school graduates had access to free community college and where strict labor standards guaranteed the lowliest worker a reasonable standard of living.

Fewer than four years later, that dream remains unrealized.

Like much of the country in the wake of the COVID-19 lockdowns, the region suffers double-digit unemployment. Seattle’s vaunted minimum wage is meaningless to those who can’t find work. The city faces a significant budget shortfall, crumbling infrastructure and bitter infighting among its progressive political class. Images of Seattle’s anarchic “autonomous zone” recently filled television screens and social-media feeds nationwide.

What went wrong?

Lots. Social benefits for the poor aren’t worth much if the poor can’t afford housing in the city that offers them. A family looking to find a place to live in Seattle must navigate a market where the median two-bedroom apartment lists for more than $2,600 per month.

Much of the problem has more to do with government overregulation. Three-quarters of residentially zoned land in the city is restricted to single-family development. Seattle’s leafy pseudo-suburban neighborhoods, dotted with yard signs signaling support for disadvantaged and marginalized groups, make it extremely hard for members of those groups to move in. No political will exists to change these zoning rules citywide.

Seattle has avoided tax-and-spend redistribution. Instead, the city has placed a series of mandates on employers: a high minimum wage (now $16.39 for large businesses), paid sick leave, secure scheduling and so forth. Even in good times, these employer mandates don’t really soak the rich, because the owners of low-wage-paying businesses often don’t take home much themselves.

The most profitable businesses aren’t the ones employing large numbers of workers. They are the ones, ironically, finding ways to use technology to make low-paid workers obsolete.

Seattle’s employer-funded safety net collapses in a recession. The minimum wage, paid leave and advance scheduling do nothing for you if you have no job. And by raising employers’ costs of re-opening, the government will likely extend the suffering.

Washington state has no state income tax, and it imposes restrictions on property taxes levied by local government. While the Emerald City may aspire to emulate New York, where state and local governments spend more than $9,000 per person every year, revenue limitations keep the Evergreen State to a more modest $5,342 per capita, just above the 50-state average.

Seattle has repeatedly chafed against the state’s revenue-raising limits. The city enacted a progressive income tax in 2017, only to have it ruled unconstitutional in state courts. State law permits the city to circumvent property-tax limits with voter approval. Voters approved levies to pay for transportation improvements in 2015, a municipal campaign-finance fund in 2015, affordable-housing programs in 2016, education programs in 2018, and to boost public library funding in 2019.

Together, these levies place Seattle’s property-tax rate near double the statutory maximum. Each time voters approve a circumventing new tax, the associated spending programs receive a relatively recession-proof source of funds that can’t be diverted to other spending needs.

The functions of city government not directly supported by voter-approved levies, most notably the police and fire departments, compete for dollars from the city’s general fund, which relies on sales and business taxes. The 2020 budget projected $1.73 in revenue from these volatile, regressive sources for every $1 in support from property taxes.

Seattle’s jury-rigged tax system leaves the city poorly equipped to fund basic services during a recession. In successive ballot proposals, Seattle taxpayers have approved specific amenities and progressive touchstones. Fundraising for the fundamentals of local government has been left off the menu. The city has dedicated property-tax funding to pay for free preschool, but not to pay for police.

It operates two streetcar lines, built for $185 million, that serve fewer than 5,000 riders a day between them. Its four-and-a-half block downtown bike lane cost $3.8 million. Meantime, the city-owned West Seattle bridge, which once carried 100,000 vehicles per day, sits damaged and closed, facing an estimated $60 million annual bill for deferred maintenance.

As Seattle struggles through the coronavirus recession, it’s clear that progressive policies are no guarantee of prosperity.

This piece originally appeared at the New York Post


Jacob Vigdor is an adjunct fellow at the Manhattan Institute, the Daniel J. Evans Professor of Public Policy and Governance at the University of Washington, and a research associate at the National Bureau of Economic Research. This piece was adapted from City Journal.

This piece originally appeared in New York Post