All other bullshit aside, it turns out that Seattle city government is pretty damn well run.
At a special budget meeting of the Seattle City Council yesterday, Mayor Mike McGinn's budget director Beth Goldberg introduced several proposals for replenishing and strengthening the Revenue Stabilization Account, the city's "rainy day" fund, which now stands at $11.2 million, down from a high of $30 million in 2008. The proposals include dedicating 0.5 percent of all general revenue tax receipts to the fund, along with half of all end-of-year fund balances in excess of that forecast. The rainy day fund is capped by law at 5 percent of annual general revenue tax receipts, currently about $37.5 million, and the goal would be to rebuild the reserves toward that maximum amount.
Why set aside millions of dollars a year at a time when the city is already struggling to balance the budget in the face of declining tax revenues? Isn't this a rainy day? Isn't the goal of the rainy day fund to fill budget gaps just like the one we have now?
Well, not exactly. According to both Goldberg and the council's central staff director Ben Noble, the purpose of the reserve fund is to help ease the transition to a lower budget state rather than avoiding the transition entirely... a role the fund has played well over the past few years. Now that this adjustment period is over, it's time to rebuild the reserves, they argue, so that the city is well situated to weather future economic downturns.
Seattle also maintains an additional $44.3 million in its Emergency Reserve Subfund (think earthquake), and it turns out that fiscal prudence like this has served the city well, enabling it to preserve its AAA bond rating throughout the Great Recession, even as some other municipal governments teeter on the brink of insolvency. (For example, Jefferson County, Alabama, is asking creditors to forgive $1.3 billion of its $3.2 billion in sewer debt in an effort to avert what could be the largest US municipal bankruptcy ever.)
Seattle's bond rating doesn't just effect borrowing costs for the city proper, but also for capital intensive agencies like Seattle Public Utilities. While the impact of bond rating changes are hard to calculate, Noble says that the difference between one ratings notch could come to "hundreds of thousands if not millions of dollars" in additional interest payments a year.
So yeah, Mayor McGinn is a tree-hugging/bike-riding/tunnel-hating/closet-San-Franciscan, but when it comes to fiscal matters, it turns out he's rather, well, conservative compared to say, the debt-addled speculators running the foundering Seattle Times. Even McGinn's opposition to the deep bore tunnel—an obsession that some have used to label him a goofy liberal—is largely based on fiscal concerns: That it is too expensive, provides too little benefit for the cost, and poses an unacceptably high risk to tax payers.
I know this portrait of McGinn as a fiscally responsible budgeter runs counter to caricature, but it's hard to argue otherwise.