visit to Olympia

I went to Olympia on 3/21 to advocate for house bills 1953, 1959, and 1898, all related to generating funds and/or designating transit governing districts for public transit.  Since after several efforts at calling and emailing the legislator, Jamie Pederson, from my district (43rd) who is one of the sponsors for HB 1959, I was unable to get a meeting time arranged, I settled for an appointment at 2:30 Thursday with staff of the other legislator from my district, Frank Chopp, to encourage a yes vote on these three bills.

Bill 1953 is aimed at expanding use of the MVET, Motor Vehicle Excise Tax, to 1.5% of vehicle value, with proceeds to go to public transit. Bill 1959 will put a .3% increase in the sales tax on the next ballot.  This bill I semi-supported, but think the tax should come from business taxes and not add to the already high and regressive sales tax (which has been repeatedly voted down anyways). Bill 1898 refers to creation of local districts for transit governance, which was the bill I was most interested in since it gives the Seattle metro area more control over collecting and distributing funds for its own transit use.

The points I wanted to make with the staff to advocate for voting yes on these three bills, and other transit bills in general went like this: The two-year extension of the car tab tax is set to expire next year. Having already faced and temporarily avoided a 17% budget cut, Metro busses are likely to experience dramatic further cuts in lines and headway times in 2014 if no new funding is supplied.  This is socially unjust to low-income residents who depend on public transit, and in addition it is a negative for business interests who benefit from workers being able to have a reliable commute.  Further, it is not only low-income urban residents who have an interest in supporting public transit:  From 2001 to 2009, young people (16 to 34-years-old) who lived in households with annual incomes of over $70,000 increased their use of public transit by 100 percent, biking by 122 percent, and walking by 37 percent (nationwide).  [I drew this statistic from an April 2012 study by the U.S. PIRG Education Fund.] In other words, this is a generational and cultural shift in favor of transit that is important for lawmakers to understand.  The current generation of younger voters, the current and future voting base, is very pro-transit, and legislators would do well to have a pro-transit voting record.  In addition, funds for maintaining roads, included in these bills, are beneficial to bicyclists as much as to cars.

I met with Miranda Leskinen, executive legislative assistant to Representative Frank Chopp, and another staffer, Jennifer (I didn’t get her last name or card).  They were both very welcoming and willing to take time to discuss all my points with me.  While I felt that none of my points were particularly new or unexpected to them, we did talk some about the connection between businesses being pro-transit in order to get workers to the office and the willingness of businesses to contribute more funds to public transit.  Miranda said that there had been quite a lot of voiced support from the business community in regards to maintaining transit, but not much word on where they expected the funds to come from. She also gave me some points on further steps to take to advocate for the bill, such as contacting the sponsor with responses to revisions in the bill or suggestions for future revisions, and contacting the nonpartisan staffer overseeing the bill with technical questions.  She wasn’t surprised that I hadn’t managed to get any appointments with an actual legislator, since this is a busy time of year.

This was a pretty positive experience, and while I don’t feel my contribution adds up to much in this case, I think it was a great first step in being more politically active. I had never dug into the language of actual bills before or even tried to call a legislator – I’d only sent form letters now and then. I think having gone through a basic advocacy procedure and doing something as simple as figuring where the offices are, how to set up appointments, and where to look online for information, would make me much more likely to participate politically in the future. Even if I’m not convinced of the usefulness of individual in-person visits in the face of much more organized and influential interests, it was kind of fun. It also made me more aware of how it’s possible to follow and contribute to local politics beyond checking off a few briefly researched ballot issues at election times.

Advertisements

Bill 1967 – TIF

I thought it would be a pertinent idea to champion the constitutional Tax Increment Financing (TIF) bill that is making its may through the House, given its nationwide relevance and importance in place-making, community revitalization and sustainable redevelopment.  Currently this bill is proceeding through as Bill 1967 (2013-2014) after being rejected in its previous format as Bill 1881 (2011-2012). As many are aware, at this point only a watered down version of TIF is available in Washington state, and only Arizona and Washington are bereft of a TIF in their constitutions out of all 50 US states.

2013-03-18 13.55.44

My secondary plan was to discuss tax reform in Washington, as I am aware the fact that Washington relies on state sales tax, and has no income tax which unfairly burdens the less wealth – as opposed to a progressive income tax. However tax reform is undoubtedly a broad and very complicated topic hence this would be a discourse rather than any overarching plan to tackle the problem.

2013-03-18 13.48.41

On Monday 18th March, together with Yoshi Hirano, I made my way down to Olympia with an appointment to meet with the House Speaker, Frank Chopp of the 43rd Legislative District, or one of his staff. As a representative of the 43rd district Mr Chopp speaks for Fremont, Wallingford, parts of U-District, Madison Park and Capitol Hill. I reside in Fremont and whilst I am not able to be part of the voting constituency (I am an international student), I am aware that Frank has been fairly involved in the affordable housing effort in this city and felt that as House Speaker, Frank would be fairly amenable to new ideas .

2013-03-18 13.48.33

Yoshi’s idea was to discuss affordable housing with Frank, whilst I would talk about TIF and if time was available, about the wider issue of tax reform in Washington state.

Whilst not an expert by any means, I have followed quite a few opinions on both sides of the TIF debate. First some fairly in depth background- My understanding of TIF in Washington can be summarized as follows – which is a conglomeration of viewpoints on the state of TIF in Washington :

The actual TIF bill was introduced in WA 1982 as the Community Redevelopment Financing Act. However has faced significant hurdles.

Under traditional TIF: Traditional TIF financing taps increased property taxes generated by private development, and applies those taxes to pay bonds issued to finance the public infrastructure supporting the development. A particular TIF district will be located within various overlapping taxing districts, and the TIF mechanism captures the increased property taxes of all of the overlapping taxing districts. Under the 1982 CRFA Act.

  1. The public improvement must be located within an urban area.
  2. The public improvement will encourage private development.
  3. The public improvement will increase the fair market value of property.
  4. Private development will be consistent with existing comprehensive land use plans.
  5. The public improvement has been approved by the legislative authority of the city, town, or county where the improvement will be located.

A UW viewpoint (sources below) gives an example of the types of improvements possible:..(funds) can be applied to affordable housing, public infrastructure, including parks, or to clean up brownfields among other possibili- ties. These funds can only be used within the designated Tax Increment District. 

However, KL& Gates the law firm states: Traditional TIF is Not Available in Washington… Traditional TIF financing has been held unconstitutional under Washington law. In Leonard v. Spokane, 127 Wash.2d 194, 897 P.2d 358 (1995), the court held that a 1982 TIF statute violated Article IX, Section 2, of the state constitution, which requires that “the entire revenue derived from the common school fund and the state tax for common schools shall be exclusively applied to the support of the common schools.” The 1982 TIF statute permitted the formation of TIF districts in which incremental property taxes, including the state property tax, could be applied to pay for public infrastructure. The court found the diversion of state property tax to be inconsistent with Article IX, Section 2.  

In plain English – TIF is illegal because it violates a constitutional which holds education as a primary part of the state constitution by taking funding away from it.

The Sightline article states: Article IX is the portion of the constitution that determines that the paramount duty of the state is educating children. The conflict arises because Article IX currently requires that a portion of the increased tax revenue generated from the TIF-funded improvements would go to pay for education. In fact, there is a “state school tax,” which is a property tax assessed specifically for the benefit of public education. But in order for TIF to work, the increased revenue would not at first go to the state school tax, but to retiring the TIF-related debt. And Washington courts have consistently held that the state’s paramount duty is more than aspirational, it means that education has to be fully funded.

As a result:

Washington legislature has since authorized “TIF- lite” districts that capture increases in local property taxes. Washington TIF-lite districts must, however, work within the constitutional and statutory constraints on property taxes, including Washington’s statutory 101% limitation on annual increases in property taxes….

Washington taxing districts generally can capture only the full increase in property taxes from new construction and improvements, and must forego the full increase in property taxes resulting from appreciation in property values within the TIF-lite district. 

Essentially the conclusion is:  Application of the TIF Act is limited in the amount of funding it can provide and the projects it can support because

  • Only 75 percent of the incremental increase can be used to repay general obligation bonds
  • The City would need to conduct a feasibility study. Estimates indicate that a TIF financing is only viable if $1 million in bond yield at least $35 million in increase in assessed value1 

The New Bill 1967 tries to eliminate that by among other things:

  • Changing the definition of which areas can apply a TIF – to make it more widely applicable (to non urban areas if they include growth center, a transportation center, or a local center.)
  • Not taking the financing from regular property tax applied to the incremental value increase- because this is the non-constitutional part of the 1982 bill. Rather a county or city is authorized to levy a special property tax within the apportionment district. This special property tax is applied to the incremental property value growth in the district after the district has been established (achieves the same purpose)
  • Increasing the limit making it subject to its own 1% limit- property taxes are currently  subject to the 1% property tax revenue limit, the 1% constitutional limit, and the $5.90 limit for every $1000 of property value (which basically means except for a few special taxes like emergency medical service levies it needs to be max 0.59%) – taken altogether property taxes are pretty much no more than 1% of total value
  • 20% of the TIF funding needs to go into community benefit programs of that –at least 50 % must be dedicated to low and moderate- income housing; at least 20% must be dedicated to the conservation of open space; and the remaining 30%
  • In a nominated district – 50% of the value of taxable property in the district or 65% of the parcels need to agree.

Roger Valdez’ crosscut article states that: According to the early estimates, amending the state’s Constitution through passage of the CRFA would generate as much as $66 million to service debt over 30 years in a case study of the BelRed station area in the Bellevue neighborhood. That compares to $5.8 million fromLocal Revitalization Financing (LRF), and $1.8 million from Landscape Conservation Local Infrastructure Program (LCLIP) championed by the non-profit Forterra. Traditional TIF similar to Oregon’s would generate about $14.6 million.

My plan:

 

I generally agreed with the new 1967 Bill in its definitions and amounts – especially in the way it skirted around the constitutional issue. however i believe that the special  property tax rate for TIF is too low! The current maximum rate of 1% and the addition of a max. 1% special property tax on incremental  value growth- Would still result in a new combined property tax rate (in incremental) that is too low.

If TIF is so effective, why not raise the TIF tax to more than 2-3% of the incremental value increase? If a property valued at 500,000 increases by 50,000 as a result of putting a transit hub through the area, the cost – the incremental increase in taxes is still only $500 per annum which compared to the gain in value is extremely appealing. A 2-3% increase would result in higher takings of $1000-2000 pa, which has homeowners still better off.

In California, the property tax rate is approx 1.25%, and I believe TIFs  are allowed in addition to that. My home state of Victoria, has property taxes of approximately 2.5%. However with that level of taxation comes excellent infrastructure along most transport corridors. Whilst i am not advocating Seattle increases taxes to 2.5%. I believe the rate is too low. I am pro-taxes, from the standpoint that it increases welfare across the board fairly well.

The increase in property taxes can help fund the much needed improvements to mass transit – which most would agree Seattle requires, and also bring back some of the state funding for higher education.

THE MEETING and OUR CONCLUSIONS:

The meeting occured at 1.30pm and lasted approximately 10 minutes. Unfortunately, whilst I had prepared extensively for this meeting, Frank Chopp’s legislative aide, Miranda was not extremely knowledgeable on the topic of Affordable housing or TIF.

This is not to say, she did not have clear ideas. She was extremely helpful in providing myself and Yoshi with the contact details for people who were the main sponsors of our respective bills – especially in the Finance committee within the House. She also spoke fairly candidly in agreement with the need for a state income tax which would help equalize some of the wealth inequality in Seattle, however our discussion of raising TIF taxes to a higher amount would need to wait another day..

Whilst the amount of effort expended in our research vs the amount of actual discussion that occurred was fairly discouraging, we did find it an informative experience. This was especially so from the perspective of us as international students – fairly unfamiliar with the way politics works in the USA.

With the knowledge gained, I am able to more critically view TIF from the government and community perspective.Indeed I hope to significantly increase my knowledge on property taxes, and TIF as it is extremely relevant to me as a future real estate professional and community citizen. I also look forward with significant interest to see the progression of this bill, and how it is applied within Seattle, hoping by all accounts we can avoid the difficulties that TIF has experienced in places like Chicago and California due to partisan politics and vested interests.

2013-03-18 13.53.03

2013-03-18 13.54.06

THE BILL:

1967:

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1967&year=2013

http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bill%20Reports/House/1967%20HBA%20FIN%2013.pdf

1881:

http://apps.leg.wa.gov/documents/billdocs/2011-12/Pdf/Bill%20Reports/House/1881%20HBA%20WAYS%2011.pdf

FOR:

http://www.djc.com/blogs/SeattleScape/2010/12/20/uniform-taxation-a-tif-problem-to-solve/

http://seattletransitblog.com/2011/12/14/why-is-a-constitutional-amendment-for-tax-increment-financing-so-important/

http://www.seattle.gov/council/attachments/codac/20080807tax_inc_financ.pdf

http://daily.sightline.org/2010/09/22/incrementally-yours/

http://crosscut.com/2012/04/09/washington/22147/The-ongoing-tiff-over-TIF/

NEUTRAL:

http://depts.washington.edu/open2100/pdf/3_OpenSpaceImplement/Implementation_Mechanisms/tax_increment_financing.pdf

http://www.seattle.gov/dpd/cms/groups/pan/@pan/@plan/@proj/documents/web_informational/dpdp022590.pdf

http://reconnectingamerica.org/assets/Uploads/2011Tax-IncrementFinancingPRIG.pdf

http://www.mrsc.org/artdocmisc/m58-tifgates.pdf

http://www.cfses.com/documents/events/2011-Wshop-CUFE/MORRISON_2011_Aust_Local_Government_Property_Rates.pdf

AGAINST:

http://www.chicagoreader.com/chicago/rahm-emanuel-keeps-control-of-tif-money/Content?oid=8175391

http://nextcity.org/forefront/view/out-of-cash

Seattle’s Amazon Rain Forest

My final post is an edited version of the fuller post below, posted on CoreNet Global’s blog here.

“This poem has risen up from a modern world
Of ugly American cities. It has survived
Dogma and rednecks. It has learned to praise
The sun and earth, to lower
Its quirky, unneeded tail
Right into the thick of things.

This poem has small blind eyes
And an accidental bump
On its nose to feel through the dark.
It will never grow feathers
Or a unicorn’s spiral. It has accepted
Its horns like two mushrooms,
And will sacrifice itself for other
More efficient poems,
With larger muscles and sharper claws.

This poem scuttles along
On tiny legs, taking joy in the fact
That it has breathed its weak, small breaths,

Like a glowing ash
That has drifted up into a tree,
Everyone amazed that it has lasted
Its two or three minutes,
Before it gives itself up
To a branch’s black enveloping wing.”

Poem of Natural Selection, By Peter Bethanis

Similar to this poem, innovations are born, compete, thrive, and die with increasing rapidity in the young urban jungle habitat that is South Lake Union (SLU). This Seattle neighborhood is one of many would-be American innovation districts that all vie for recognition as the country’s most fertile ground for invention. In a new economy that prizes ingenuity above most else, the stakes are high and Seattle holds one wildcard that just might help it claim victory—the Amazon Rain Forest.

SLU has an abundance of highly developed human capital and strategic partnerships between enterprises and institutions. While these key ingredients were stressed in earlier iterations of innovation systems theory, they alone are not the special advantage that I have alluded to.  More recent thinkers in the field of innovation stress the importance of innovation ecosystems, and the SLU ecosystem appears to hold several important advantages over its rivals.

In The Nature of Economies, the renowned urbanist Jane Jacobs emphasizes that both ecosystems and economies share many universal qualities and consequently recommends biomimicry as a technique for urban economic optimization. Biomimicry, the gleaning of design inspirations from nature, has been championed by many, but most notably by Janine Benyus of the Biomimicry Institute. While frequently utilized by new inventions and technologies, it is also very relevant for systems design, and it appears to be a key factor behind the evolution towards “innovation ecosystems” theory.

The recent whitepaper and book of venture capitalist and innovation consultant Victor W. Hwang analyzes Silicon Valley as an ecosystem in order to identify systemic attributes that facilitate intense levels of innovation. If those attributes exist in a place, then that place can be termed an innovation ecosystem, or “Rainforest” as Hwang conveniently prefers. Many of the key mechanisms that Hwang uses to explain Silicon Valley’s success also operate in rainy Seattle’s South Lake Union district, the self-selected home of the booming tech giant, Amazon.

Contrasting with earlier theorists’ focus on system organization and structure, Hwang suggests that innovation is not a known product that can be farmed, but instead is more like a weed that springs up in the presence of creative chaos. To foster innovation, districts should “run operations like a rainforest, not controlling the specific processes but instead helping to set the right environmental variables that foster the unpredictable creation of new weeds. While plants are harvested most efficiently on farms, weeds sprout best in Rainforests.” So what are those key variables that make Rainforests work? “Diversity of talents, trust across social barriers, motivations that rise above short-term rationality, and social norms that promote promiscuous collaboration and experimentation among individuals. This is the culture of the Rainforest.”

Hwang’s examination of these key variables relates primarily to culture and this results in a set of prescribed behavioral norms or “rainforest rules” for fostering innovation. While this is helpful, it fails to recognize the latent potential of the built environment to help optimize those key variables that lead to invention. Amazon recognizes this potential and chose to locate in South Lake Union as a result.

Amazon’s location decision is a strategic rejection of the suburban norm for tech heavyweights, many of which choose Silicon Valley. The dense South Lake Union innovation ecosystem offers several key advantages, especially diversity of talent. Diversity of talent not only helped inspire the propagation of biomimicry as a design strategy, but it also explains the planned colocation of innovation industries in burgeoning innovation ecosystems such as SLU. Janine Benyus uses the term “fertile crescent” to describe the overlapping edges between fields of thought that are so effective at breeding innovation. The pairing of life sciences and technology industries is a common example of this and is a key advantage for SLU. Seattle’s cultural diversity and tolerance is another layer that amplifies the creative productivity of talent.

Beyond talent diversity, the low cost of living and density in SLU (relative to Silicon Valley) promotes “rapid, promiscuous collaboration and experimentation among individuals”—a startup culture that produces symbionts or parasites, depending on the point of view that Amazon adopts. Considering that Amazon’s own organizational structure favors smaller and autonomous innovation units that parallel startups in many ways, it’s reasonable to assume that the company values the startup-friendly ecosystem and is willing to risk the potential loss of talent in exchange for creative synergies and serendipitous epiphanies. In other words, Amazon is willing to “trust across social barriers” due to its “motivations that rise above short-term rationality.” While some talent flows might leave the boundaries of its corporate system, Amazon is now positioned in the heart of a larger Rain Forest. This is a competitive strategy unlike any of its tech rivals—a significant advantage in the new economy of the 21st century.

When Jeff Bezos directs Amazon’s real estate team to read Edward Glaeser’s Triumph of the City, it’s a victory not only for South Lake Union, but also for nature and economies everywhere. The importance and power of corporate actors is steadily increasing, for better or worse. Acknowledging this, it is absolutely critical that more corporations recognize the value of dense, urban environments. Leveraging corporate investment to make cities more livable and productive places is a key strategy towards ensuring a sustainable future for the global ecosystem.

What’s so great about online shopping?

Following some of the discussions in class I gave Amazon Fresh a go last week and was pleasantly surprised. So I decided to write my final blog about the benefits of online shopping.

I published my blog in the Central District News website. If you’re interested you can read it here:

Bills 1233 & 1235

I was at Olympia this week to speak with Rep. Gerry Pollet (46th District) about House Bills (1233 – Including health in the state transportation system policy goals; 1235 – Prioritizing state investments in storm water control). I supported both the bills, and wanted to propose some improvements.

While the HB 1233 “failed to be voted out of the House before House of Origin cutoff” before my meeting with Rep. Pollet, I still conveyed my support to the bill (which Rep. himself said he supports) and asked if it would come back (and the answer is “most probably yes”). I told that increasing the scope of consideration-set for state’s transportation policies is a good thinking and along that line policy-making shall identify and bear all the stakeholders and affected entities in mind (global optima) and this bill is a right step in that direction.

On HB 1235, we talked about storm-water run-off management (not being great) in Seattle. I had a specific improvement in mind for this bill, which is to include requirement of installation of rainwater harvesting mechanism (roof-top, guzzler…) to reduce storm water runoff – this has multiple advantages: one, reducing pollutant ending up in the Sound via storm-water run-off; two, reducing utility-supplied water usage (and thus its operational costs, inefficiencies) – the grey water re-use covered in Carbon Efficient City book. We could not finish talking through this as Rep. Pollet had to head out for another meeting.

I continued the conversation with Rep. Pollet’s LA, who mentioned that bill sponsors, legislative committee members, and bill-drivers/organizations such as WA Environment Coalition, Transportation Environmental Coalition are best to be contacted for change in language of the bill.

While the experience was exciting (though initially nerve-wracking) and a good learning experience, I completely agree with thoughts on this blog-post about the leverage and influence we have on legislators.

Legislative Trip to Olympia

On Thursday March 14th, I, as well as classmate Mallory Wilde, trekked down to Olympia to ask our legislator, Rep. Jessyn Farrell, a few questions about bills that she was involved in with the Transportation Committee.  Despite the fact that I was from another district (Rep. Tarleton is my legislator but was unable to schedule a meeting that didn’t conflict with my classes), Mrs. Farrall was able to schedule us from 3:15 to 3:30 on the 14th, and had no qualms with a 2 person interrogation.  The objective was to tell her a Transportation Engineers prospective on a few bills.

The bills we were there to discuss were HB 1745 and SSB 5152.  HB 1745 had to do with the continuation of the SR 167 HOT Lanes after their initial period ended, and SSB 5152 was in regards to the addition of Seattle Sounders FC and Seattle Seahawks to the special license plate list.

                The issues Mallory and I had were very similar with each bill, seeing as we have similar background.  Obviously when it came to the SR 167 bill, we were supportive of the bill getting passed and for the written bills striking through the language that stated the SR 167 trial period was a positive.  The HOT Lanes have proved to be a valuable source of income, and they also have helped to increase flow by having more people get through that lane than the other lanes, according to data we received in class.  It seemed like keeping these lanes was a major positive for the community and we wanted to voice that.  Even though the congestion has increased in this special lane, overall roadway congestion has decreased, furthermore making this a good decision to pass.  Next was the license plate bill.  There are already 26 separate types of license plates that are made available to the general public outside of the standard “Mountain” plate.  Each one of these requires the tolling transponders along 520 and similar roadways to adapt its technology in order to pick up.  The cameras are set to get rid of the blue Mt. Rainier in order to only read the license plate numbers, but they aren’t completely set to read other plates. Such as the WSU one, where the letters are white and the color of the crimson gets removed.  We wanted to express how difficult it was becoming to read these plates, as well as how each one that gets flagged has to be manually read.  We wanted to remove the strike through of the line of the bill that deleted the “trial period until July 2013” for all previous plates, that way more data can be collected on the previous license plates.

 

Here is a picture of one of the random plates we found in the parking lot:

Image

                Once we arrived at the meeting, we were told the Rep. Farrall was busy and we would be meeting with her Legislative Assistant, Nigel Herbig.  He greeted us and welcomed us in, and then asked what sort of questions we had.  We voiced out opinion on the SR 167 bill, and he informed us the Farrall was also a big supporter and voted yes.  However, it did not pass due to the Republicans and “their refusal to look at the facts of the congestion.”  He even named names of people who voted against it.  He said how they were too often referred to as “Lexus Lanes” and had an elitist aura about them, which made it hard to pass.  Next up was the License plate bill.  Mallory brought up the point that new license plates were hard to read, and that there were such plates like “I love pets” that were clogging up the system.  Nigel said how they had never thought of that before, but at the same time he seemed to shrug it off and was making jokes about how the bill was a joke and would get passed regardless.  After the meeting, the Transportation Committee was in session so we decided to go see them debate these bills before our eyes.  As it turned out, all the money from those License Plates would go to underprivileged kids, so it’s probably a good thing we didn’t speak out.  The highlight of my day was when a bill was discussed about the legality of having people ride in a car being towed.  At first I thought it was an idiotic idea and laughed, but after a few stories were told about how it would be beneficial, I was sold as well. 

I took many things away from this experience.  It was very interesting to see things that engineers work on get talked about in legislation, with none of the technical items ever getting brought up.  More time was spent on the public perception of the HOT Lanes than on the actual data and algorithm used to determine fair prices.  I always assumed that all the data would be presented, but that’s not how it was.  I was also shocked to hear Nigel laugh when we brought up the License Plate issue.  I realize that it is kind of a no brainer, but at the same time there are 2 sides to all issues and there was a new license plate restriction enacted for a reason.  I really enjoyed watching the committee meet, as well as just walking around the grounds after.  All in all, a great trip!

 Image