Saturday, February 19, 2011

King County: proposed state bill to help draw more visitors and conventions to King County

On Friday, Washington State Representative Tina Orwall (D-33) introduced House Bill 1997.

In a statement from the King County Executive's Office the bill was described thusly:
Business, labor and arts leaders joined today in backing a bill requested by King County Executive Dow Constantine and introduced today in Olympia by State Rep. Tina Orwall to stimulate economic growth through support of programs that draw more tourists here.

"Every visitor we bring to King County spends money and provides revenues needed to support human services, housing, public safety, and transportation," said Executive Constantine. "As the economy begins to recover, we need to do all we can to position the region for economic prosperity."

Rep. Orwall's bill would reinvest four revenue streams currently dedicated to Safeco Field and Qwest Stadium to support arts and cultural programs, expand the Washington State Convention Center, establish workforce housing to help workers such as those employed in the hospitality, service, arts and related industries, and support other projects that spur tourism countywide and generate economic benefits.

"The arts are an economic engine that generates $1.75 billion in local activity that benefits everyone," said Executive Constantine. "The work to essentially double the capacity of the State Convention Center will provide thousands of good-paying construction jobs in the short term, and over the long term will draw hundreds of thousands more visitors who will spend an estimated quarter-billion dollars in new money here and create even more jobs."

"Cultural organizations employ 29,000 people in King County and generate $79 million dollars in tax revenue alone, according to a recent ArtsFund study," said Jim Kelly, Executive Director of 4Culture, the King County Cultural Development Authority. "Beyond the economics, the arts bring people together, allow us to share our diverse cultural traditions and build a sense of community that is inclusive for all."
. . .

The new expanded convention center is estimated to bring in 130,000 additional new visitors per year once it reaches stable operations. Expanding the facility sooner will result in $1.4 billion in additional economic activity over the first decade.
. . .

"Tourism dollars are enormously important to Downtown Seattle's well-being," said Kate Joncas, President of the Downtown Seattle Association. "Paired with an expanded convention center, greater investment in our hospitality industry not only means more visitor dollars, but more local jobs here at home."


Under the proposed legislation (HB 1997), four local revenue streams would stay in King County and be continued to support local economic growth:

* The 2% hotel/motel tax within King County would be continued. This revenue is committed to other purposes through 2020 but would be available for the activities proposed starting in 2021.
* The 0.5% sales tax collected at restaurants and bars in King County would expire as scheduled under law at the end of 2015. Because the bonds for Safeco Field are being repaid later this year, the remaining years of this revenue stream would be available for the proposed economic activities.
* Two car rental taxes totaling 3% would be continued.
According to Rep. Orwall's office, four specific projects are included in the legislation:

* $3 million per year from 2012 to 2020 would go to 4Culture, King County's Cultural Development Authority, which provides programs, financial support and services in the arts, public art, heritage and historic preservation.
* $5 million per year from 2012 to 2020 would go to the development of housing affordable to working people, such as those employed in tourism, hospitality, or arts related fields.
* $1 million per year would go to the Community Development and Preservation Authority Account to support the livability and visitor economy of neighborhoods near Safeco and Qwest fields.
* Remaining funds would support expansion of the Washington State Convention Center and other capital projects and programs that support tourism and generate economic activity in the region. The expanded Convention Center alone will draw tens of thousands of new visitors each year, and result in increased employment and tax revenue.

The Legislature last year converted the Washington State Convention Center from a state non-profit corporation to a King County Public Facilities District.

The main point of the bill can be found on page 10, in New Section 4.
NEW SECTION. Sec. 4 A new section is added to chapter 67.28 RCW to read as follows:
(1) As provided in subsection (2) of this section, revenue deposited in a special MLK workforce housing, arts and preservation, convention and trade center, and community development fund, as provided in RCW 67.28.180(3)(d), 82.14.049, and 82.14.360, must be used only for affordable workforce housing; the expansion, construction, repair, or maintenance of a convention and trade center; art museums, cultural museums, heritage museums, and heritage and preservation programs; the arts; the performing arts; and community development.
(2) Beginning in calendar year 2012, the county must distribute money in the account annually as follows:
(a)(i) Through calendar year 2020, three million dollars for art museums, cultural museums, heritage museums, heritage and preservation programs, the arts, and the performing arts. The funds must be broadly and equitably distributed throughout the county, and provide increased outreach to underserved communities;
(ii) Beginning with calendar year 2021, 37.5 percent of the revenues described under RCW 67.28.180(3)(d) must be used for the purposes of (a)(i) of this subsection;
(b)(i) Through calendar year 2020, five million dollars each year for distributions to nonprofit organizations or public housing authorities for affordable workforce housing near or at transit stations.
(ii) Beginning with calendar year 2021, 37.5 percent of the revenues described under RCW 67.28.180(3)(d) must be used for the purposes of (b)(i) of this subsection;
(c) One million dollars for the Pioneer Square-International District community preservation and development authority under RCW 43.167.060 for projects requested by the community preservation and development authority and approved by the county legislative authority. The projects must have a historic preservation, economic revitalization, or tourism-related purpose. Beginning in calendar year 2013, and every year thereafter, the amount distributed under this subsection (2)(c) must be adjusted by the immediately preceding October-to-October change in the consumer price index; and
(d) The remainder for the construction, expansion, or repair of a public facilities district created under chapter 36.100 RCW to operate a convention and trade center transferred from a public nonprofit corporation under RCW 36.100.230(1); however, distributions under this subsection (2)(d) are allowed only to the extent that estimated future distributions under (a), (b), and (c) of this subsection can be made in their full amount.
(3) Beginning in calendar year 2013, and through calendar year 2020, the amounts distributed under subsection (2)(a)(i) and (b)(i) of this section must be adjusted by the immediately preceding October-to-October change in the consumer price index.
(4) For the purposes of this section, the following definitions apply:
(a) "Affordable workforce housing" means housing for a single person, family, or unrelated persons living together whose income is at or below eighty percent of the median income, adjusted for household size, for the county where the housing is located.
(b) "Consumer price index" means the Seattle-Tacoma-Bremerton consumer price index for all urban consumers (CPI-U) available from the bureau of labor statistics of the United States department of labor.

House bills have been overly prescriptive in the past, this one is no different. What may be different is that King County Executive Dow Constantine may have worked out agreements between competing interests for the tax revenues. It is hard to say, because the only substantive difference this year is that Husky Stadium out and the Washington State Convention Center is in. I expect the negotiated elements to survive a trip through the Senate Ways & Means Committee, but not the instructive nature of the House bill. Does anybody seriously think they can predict a meaningful investment of $1 million dollars a decade from now?

No.

In Senate fashion, they will likely agree to much of the intent and they segmentation (75% here, 25% there, this fund and that fund for a given purpose).

What could loosely be described as a companion bill that was also introduced yesterday is Senate Bill 5834.
Bill Sponsors: Senators Ed Murray (D-43, Majority Caucus Chair, Senate Ways & Means Committee Chair), Steve Litzow (R-41), Rosemary McAuliffe (D-1), Sharon Nelson (D-34), Andy Hill (R-45), Scott White (D-46), Jeanne Kohl-Welles (D-36>, Joe Fain (R-47), Tracey Eide (D-30, Majority Floor Leader).

AN ACT Relating to permitting counties to direct an existing portion of local lodging taxes to programs for arts and heritage; and amending RCW 67.28.180.

I would include more text from the bill but there really isn't much more to it.

The House has most of the stadium taxes, county lodging taxes, car rental taxes, and about two years of the restaurant tax, in a fairly prescriptive bill going to a few things identified above. The Senate has the county hotel tax mostly going to arts, heritage, a tourism promotion.

What is likely going to happen, based on prior efforts; the House will pass its bill and it will be referred to the Senate Ways & Means Committee. The Senate will extract much of the agreement and provide for broader terms for the county to operate with a decade from now, while preserving the intent of the funds. The SB5834 will get a substitute that can actually pass in the Senate (please note the R's attached to the current Senate bill).

What gets put in or taken out of the final bill is anybody's guess right now, but you can see where the House is starting at, pretty much where they started two years ago with HB2912. Swapping Husky Stadium for the Convention Center in this session's effort will definitely help.


From my 2011 Predictions:
2. King County will represent those that "have" in Olympia, and they will gain control of what the state will stop doing. Yes, this is the year an arts bill passes in Olympia.
The state will stop spending $6 million dollars a year on arts programs, passing the responsibility to counties.
The Washington State Legislators will get out of the business of "One Washington" politics, where everyone either gets or is denied what somebody else in the state either gets or is denied. You don't want to be taxed so you don't want the mean old state to force services on you, good luck to the "red" counties. (not really a prediction, but a point of fact).

9. King County will revisit the plans for the expansion of the Washington State Convention Center (now a Public Facilities District), with a public/private proposal that is only missing one thing, the private business.

Lastly, why did those bills come out yesterday?
2/21/2011 the last day of the legislative session that bills can be introduced in the respective houses. Plenty of rules can be bent, but this was pretty much "last call" to get a bill introduced and passed in a fairly normal flow. Bills get hearings, executive session for vote in committee, floor votes, passed to the other side for more hearings, executive committee votes, floor votes, reconciliation.
The real exception to the 2/21/2011 cutoff is the Senate Ways $ Means Committee. If the House wanted a bill on this subject spelled out their way then they had to get something out there.

February 21, 2011 Last day to read in committee reports in house of origin, except House fiscal committees and Senate Ways & Means and Transportation committees.

February 25, 2011 Last day to read in committee reports from House fiscal committees and Senate Ways & Means and Transportation committees in house of origin.

March 7, 2011 Last day to consider bills in house of origin (5 p.m.).

March 25, 2011 Last day to read in committee reports from opposite house, except House fiscal committees and Senate Ways & Means and Transportation committees.

April 1, 2011 Last day to read in opposite house committee reports from House fiscal committees and Senate Ways & Means and Transportation committees.

April 12, 2011* Last day to consider opposite house bills (5 p.m.) (except initiatives and alternatives to initiatives, budgets and matters necessary to implement budgets, differences between the houses, and matters incident to the interim and closing of the session).

April 24, 2011 Last day allowed for regular session under state constitution.

* After the 93rd day, only initiatives, alternatives to initiatives, budgets and matters necessary to implement budgets, messages pertaining to amendments, differences between the houses, and matters incident to the interim and closing of the session may be considered.
(See the cutoff calendar here)

Good luck!

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