Tell me again how this is moderate? How is it anything but Republican tax ideology? by Ron Davis This post also appears in Rondezvous.  Seattle currently dedicates less of its economy to public spending than did in the famously austere recession-era of 2012, but you sure wouldn’t think so based on the histrionics from the Seattle Times Editorial Board, or all the talk from the conservatives on the Seattle City Council about waste and bloat and audits.  That’s because they appear to buy into the story told by downtown’s big business interests last year. According to a “study” paid for by the Downtown Seattle Association (DSA), Seattle budgets had actually grown faster than inflation and population. Like Newt Gingrich and Paul Ryan before them, and like Dave Reichert in his recent debate against Bob Ferguson, they claimed the problem with our public realm was waste, not a lack of resources.  Unfortunately, the DSA cobbled together a tale that looks like it was deliberately designed to mislead.  First, their “study” picked 2012 as its starting budget year. You may remember that in 2012 we were suffering a grindingly slow economic recovery and global austerity.  In fact, the Seattle budget had actually declined from four years prior (from $925,687,000 in 2008 to $919,738,000 in 2012!). Had they started four years earlier, they would have found a much, much smaller growth rate for the budget, and another 30,000 people to contend with in their population increase. So 2012 was the perfect year for starting this tall tale.  Second, their “study” focused on inflation and population growth as they relate to spending. Had the authors done what any first-year economics grad student would know to do, they would have looked at spending as it relates to the size of the economy. This measure is a far better indicator of whether we are living within our means.  Here’s another way to look at it. In your own household, if your annual spending increases by 25% but your income is flat, then you might have a spending problem. But if your income has doubled, then you are probably living frugally. The “study” crucially left out that kind of information–the income of the people and businesses of Seattle (our economy) went up faster than our spending. Third, the inflation rates of services and construction (which is most of what cities do) almost always increase faster than general inflation anyway, because they are more labor intensive. Headline “inflation” is based on an average of a mixed bag of goods that includes things like computers, TVs, and potato chips, whereas the services that the government provides (health care, housing, infrastructure) almost always get more expensive faster than average inflation. This trend holds true in the private sector as well. (For you nerds, it’s called the Baumol Effect, or Cost Disease). And this is doubly true in a place like Seattle, where construction costs are soaring in part because the price of land has skyrocketed because everyone wants to live here. This is why professional economists talk about spending as a percentage of GDP.  Had downtown interests prioritized rigor over retrograde ideology, they would have instead told the world that Seattle’s budget is smaller as a share of the economy than it was even in the bleak year of 2012.  Back then, Seattle’s 285,000 households had a median income of $66,345. Today, our 365,000 households bring home a median of $120,608.  If the City’s budget had grown as fast as its economy, today’s city council would be spending $2.14 billion of discretionary money, but instead it is only spending $1.867 billion. That’s a $273 million gap from the parsimonious period after the great recession. And using median wages likely understates the economic growth, so it’s probably an even bigger gap. To make matters worse, conservatives on the council and in the mayor’s office look set to cut an additional $260 million. That means the council is aiming to put us more than half a billion dollars below matching the shoestring spending rate of 2012. In other words, we will dedicate way less of our economy to the public realm–to stuff like parks and public safety, transportation and affordable housing–than during the most strained budgetary period of the 21st century. Tell me again how this is moderate? How is it anything but Republican tax ideology?  Now, the city officials are fully within their rights to pursue right-wing ideology. And, contrary to some hysterical commentators, I’m not saying that decision makes them Republicans–they certainly may vote for some Democrats for other reasons while pursuing a Republican economic agenda.  But it is time for the media to stop pretending this economic policy is a moderate-Democratic or mainstream Democratic approach. Moderate leaders would likely never support a budget that cuts from something already way more austere than 2012. They would first work to make our tax system fairer and prevent cuts this year, and then they would aim at a multi-year plan to meet or exceed spending as a share of the economy compared to 2012.  To raise the $290 million needed to avoid cuts this year, real, moderate Democrats would turn to the findings of the workgroup that showed how to avoid cuts and make it so our tax code stops being one of the least-fair systems in the country. True, being moderates, they might aim to cover about a fourth of the gap with the big projected increase in revenue that the city’s JumpStart payroll tax will bring in next year (without cutting any funding for affordable housing, equitable development, the Green New Deal, or small businesses compared to their current levels). But they would raise the remaining $220 million or so through these tweaks to the tax code.  And they would start studying more of the options from the progressive revenue task force in more detail, so that within a year or two Seattle’s spending levels could be restored to those of the past. (Progressives would look to something more ambitious, of course.) In other words, this Seattle budget battle does not pit moderate and progressive ideas against one another. This pits Republican taxing and spending ideology against a mainstream Democratic one, full stop.