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Tuesday, August 1, 2006 - Page updated at 12:00 AM

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City Council backs $1.6 billion transportation plan

Seattle Times staff reporter

Seattle voters will likely be asked this fall to support a $1.6 billion tax package to fix streets, bridges and sidewalks — a 20-year plan being sold as an overdue investment in a city that has neglected basic maintenance.

In a series of close votes Monday, the City Council scaled back Mayor Greg Nickels' $1.8 billion proposal, mostly by trimming the amount of the property-tax levy. The owner of a $400,000 home would pay $155 in the first year of the levy under the council plan, instead of the $195 recommended by Nickels.

The council kept the mayor's proposed 10 percent tax on commercial parking and a $25 "head" tax on every employee in the city, with exceptions for small firms and public employers.

The package dwarfs recent tax levies the city has sought for parks, fire stations and affordable housing. The largest of those, a 2000 levy for parks, totaled $198 million.

"I think this is a good investment for everyone in the city," said Councilman Richard Conlin, while debating colleagues who wanted a smaller plan.

But some business groups don't agree. They say the package unfairly burdens business and would create a bad competitive climate for Seattle.

"No question we're disappointed and surprised today," said Steve Leahy, president of the Greater Seattle Chamber of Commerce. Leahy called the property, parking and employee taxes a "triple tax on business" and predicted the chamber wouldn't campaign for the ballot measure as it stands.

Kate Joncas, president of the Downtown Seattle Association, said the plan was particularly unfair to firms in the center city, where jobs and commercial parking are concentrated.

The council's decisions Monday were made by all nine members meeting as a special committee. A final vote is next Monday, giving interest groups and citizens another week to lobby the council.

"We're not done until we're done. We're going to spend the next few days trying to see if council members will offer some amendments," Leahy said. The employee tax is the chamber's chief concern, but Leahy also said he'd like to see a smaller levy and parking tax.

Nickels rolled out his surprisingly large plan last month, arguing it was needed to catch up with the city's $500 million backlog in street paving and bridge and sidewalk repairs and a drop in state funding for Seattle's transportation needs.

As revised by the council Monday, about 70 percent of the proposed spending would go toward basic maintenance. The rest would be divided among bike and pedestrian safety, transit, landscaping, traffic signs and signals and several major projects such as a reconfigured Mercer Street and a renovated King Street Station.

The new employee and parking taxes do not require voter approval. Unless council members change their minds, those taxes would start July 1, 2007.

The 10 percent parking tax would be phased in over three years, starting at 5 percent, then increasing to 7.5 percent in its second year and 10 percent in its third.

The employee tax would exempt government employers and companies that gross less than $50,000 per year.

The levy, which would cost property owners 38 cents for every $1,000 of assessed value, would take effect in January if voters approve it Nov. 7. The levy could increase by up to 5 percent annually for the first six years. After that, state law limits levy increases to 1 percent a year.

Monday's vote capped a busy week of buttonholing and arm-twisting by council members. Some wanted a considerably smaller levy. Others sought a slightly larger parking tax. The fate of the employee tax was uncertain until Councilwoman Jean Godden cast a decisive fifth vote.

Councilmen David Della, Tom Rasmussen and Peter Steinbrueck voted for a smaller levy and wanted to limit it to six years. The trio, along with Councilwoman Sally Clark, also opposed the employee tax. But they were outvoted by Conlin, Godden, Jan Drago, Nick Licata and Richard McIver.

"I don't want to tax people out of their homes. We have to be mindful of people on fixed incomes," Rasmussen said.

Della and Steinbrueck both mentioned the difficulties their elderly mothers had recently experienced in trying to pay their Seattle property taxes.

In response, McIver cited his 84-year-old aunt and her concerns about the pocked condition of Seattle's streets. Conlin noted that recent increases in Seattle property values would more than offset higher taxes property owners would face.

Licata, the council president, inserted a provision into the package saying none of the new taxes would be used to replace the Alaskan Way Viaduct.

Nickels praised the council for leaving his plan largely intact.

"This is a great step forward and the mayor is quite pleased," said his spokesman Marty McOmber.

Bob Young: 206-464-2174 or byoung@seattletimes.com

Copyright © 2006 The Seattle Times Company

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