Durkan Unveils 2021 Budget that Uses JumpStart Tax to Fill Shortfall, Fund $100 Million in Unspecified BIPOC Investments

by Erica C. Barnett

(This article was originally published by PubliCola and has been reprinted under an agreement.)

UPDATE: Mayor Jenny Durkan’s office has confirmed that the mayor plans to use both JumpStart (payroll) tax revenues, which are currently earmarked for housing, people experiencing homelessness, and small businesses, and money from the Transportation Network Companies (Uber/Lyft) tax to help pay for her $100 million “new investment” in BIPOC communities. The details of that spending would be hammered out by a task force whose members Durkan will soon announce. (More information in original story, below.)

In a pre-recorded message complete with background music, multiple backdrops, and B-roll clips from around Seattle, Mayor Jenny Durkan unveiled a 2021 budget proposal today that relies heavily, as PubliCola was first to report, on revenues from the JumpStart payroll tax passed by the City Council earlier this year. The council expressed its intent to wall off the revenues from the tax for direct COVID-19 relief to Seattle residents in the first two years and to spend the money in 2022 and beyond on affordable housing, non-housing projects outlined in the Equitable Development Initiative, Green New Deal investments, and small business support. Durkan vetoed the spending plan (the council overturned that veto) and allowed the tax to become law without her signature.

“We’ve balanced the 2021 budget, with a $100 million investment for BIPOC communities,” budget director Ben Noble said at a press briefing this morning, referring to the money the mayor has proposed parking in the city’s “general finance” budget until a Durkan-appointed “equitable development task force” comes up with recommendations for spending the money. (PubliCola was also first to report on the task force.) “If we identify a sustainable source for that in 2022 and beyond,” such as a local one-percent income tax, “those resources could be redirected towards the council’s original intent. … Budget priorities for the city have changed, arguably, since that [JumpStart] plan was developed.”

Durkan first proposed spending $100 million on Black, Indigenous, and People of Color (BIPOC) communities last summer, as protesters called on the City to defund the police department. This morning, she argued that it was appropriate to use the payroll tax revenues for this purpose. “Everyone wants to make deep, deep commitments to the BIPOC [Black, Indigenous, and People of Color] communities and investing in those communities,” she said.

(Image: PubliCola)

“‘Dedicated’ is not really the term used with resolutions,” Durkan continued, referring to the fact that the council’s JumpStart spending plan was not a budget ordinance. “We did everything we could this year to honor the allocations [for COVID relief], and next year we will have a discussion with council to really honor the City’s commitments going forward.”

Durkan’s budget includes a $21.5 million line item for COVID relief in 2021 and $86 million in combined “continuity of service and COVID relief” this year. It’s unclear how that combined $86 million differs from the $86 million that payroll tax sponsor Teresa Mosqueda proposed spending on COVID relief, specifically, this year. The budget presentation notes that the City will also fund COVID-related activities in various departments.

The mayor did not answer specific questions about the future of the city’s Navigation Team, a group of police and social workers that, prior to the pandemic, removed encampments and offered shelter referrals to some of their displaced residents.

From the budget itself, it appears that the work of the existing team will be dispersed among various departments and that some of the funding for Navigation Team positions (though not necessarily the people themselves) will be moved into a new Safe and Thriving Communities division of the Human Services Department. That division will include staff from the existing Youth and Family Empowerment Division, domestic violence advocates who already work in HSD, and domestic violence victim advocates who would be transferred out of SPD. Some DV advocates have opposed this transfer from SPD, which is a subject I’ll write about in greater detail in a future post.

All HSD contractors will see their contracts extended at the same levels as 2020, with a small inflationary increase required by union contracts, and will not be subject to the previously required performance reviews that determined whether they would receive full funding. The decision to extend these contracts is related to the fact that the King County Regional Homelessness Authority, which is supposed to take over most of these contracts, has been unable to hire a director on its original time frame, which has pushed the schedule to get the authority up and running further into 2021.

The mayor didn’t dwell much this morning on her Seattle Police Department budget, which she said she will have more to say about in the spring. So far, it includes the reductions she has already announced, which mostly result from transferring items that can be civilianized, such as the 911 call center, into other departments. Durkan vetoed the council’s revised budget in August over the council’s plans to cut the police department by 100 positions, not all of those resulting from layoffs. (That veto was also overturned.)

The $100 million for BIPOC communities is a “blank” item in the budget. The mayor wants that spending to be determined through the work of the task force whose members she will announce this week. At the same time, the City Council allocated $3 million to a separate “community research” effort headed up by King County Equity Now; at a press conference yesterday, the group announced that they had already hired dozens of staff and planned to employ more than 130 researchers.

Durkan’s plan would keep some parks facilities, including many pools, closed throughout 2021, and would cut back spending on many transportation projects, including bike, pedestrian, and transit infrastructure improvements.

Overall, Durkan’s budget includes about 40 outright layoffs, a number the budget office was able to keep down by drawing down on revenues such as the payroll tax and levy funding and by reducing the City’s emergency reserves to $5 million next year. The revenue forecast for 2021 is actually less dire than the shortfall that resulted in major budget reductions in the budget the council adopted in August, which just withstood a mayoral veto — the budget office expects the City to take in about $1.7 billion in revenues, including the payroll tax, next year, compared to just $1.4 billion this year. In addition to the general 2020 economic collapse, this year’s shortfall resulted in lower revenues from funding sources that were impacted by COVID, including parks fees, parking taxes, and taxes on real estate transactions. “We do see that there’s hope on the horizon,” Durkan said.

Erica C. Barnett has covered Seattle politics since 2001 for print and online media. Read her latest at PubliCola.

Featured image by Carolyn Bick.

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