Watch the debate here.
(Here's an updated story with more information about this afternoon's debate)
Beginning to put more meat on their public perceptions, Seattle mayoral candidate Joe Mallahan on Thursday said he wasn’t thrilled with the assurances the city gave Russell Investments about its B&O tax rate to draw the company here from Tacoma.
Appearing with his opponent Mike McGinn, at their first debate since the two survived the Sept. 18 primary, Mallahan also drew a distinction between him and McGinn, saying he wouldn’t move to try to take over Seattle schools. McGinn had said he would bring up whether schools should come under the jurisdiction of City Hall if the now independent public school system does not begin to do better on raising student achievement and reducing the dropout rate.
Mallahan, during the primary, was largely known as the T-Mobile guy, as he played up his private management experience. McGinn, meanwhile, was largely known for his opposition to replacing the Alaskan Way Viaduct with a tunnel. Both moved on to the general election on the argument that it was time to throw out incumbent mayor Greg Nickels.
Both hit their familiar themes at the debate sponsored by the Greater Seattle Chamber of Commerce and other industry interests at the largely full Cinerama theater.
Indeed, the most heated moment -- during a debate that lacked the fireworks or “car crashes” that moderator and KUOW host Steve Scherr hoped for at the noon matinee – came over the viaduct issue, Mallahan stopped short of saying “you lie,” blurting out, “that’s disingenuous,” while McGinn was in the midst of his refrain about how 70 percent of Seattle voters had opposed the tunnel plan in a 2007 advisory ballot.
McGinn said tunnel supporters have to make a case when “you’re going to overturn a vote of the people” and that case “has not been made” in supporting the costly plan.
McGinn argued as he has throughout the campaign that city taxpayers are responsible, under legislation passed by the state this year, for any cost overruns. He supports a less costly plan, which would involve widening I-5 and diverting traffic now on the viaduct on to city streets. McGinn said the cost of the plan could be done under a gas tax increase approved by state voters, lessening the city’s $930 million share of the tab.
Mallahan spokeswoman Charla Neuman said after the debate that the “disingenuous “ remark was about the idea that the state would use the gas tax dollars on an I-5 plan that’s not currently supported by key state officials.
State lawmakers have said that the tunnel plan—the product of negotiations between the city, the state, King County and other interest – is a done deal and that the state plans to move ahead regardless of what the city thinks.
Mallahan made reference to business and labor concerns that the I-5 plan would slow the movement of goods and a stare down with the state would lead to gridlock, when there is no consensus around the I-5 plan either.
He said revisiting the tunnel deal could lead to “four years or eight years of trying to reach another consensus while we hold our breaths against a seismic event.”
McGinn, however, answered that the state and other government should be willing to go to the table and seek a less costly solution given the state of their budgets.
Mallahan’s position on Russell Investments was somewhat surprising since he has been considered to be the more pro-business of the two. Russell is moving from Tacoma to downtown Seattle after being given assurances from Seattle officials that it will not be paying more taxes than in Tacoma. To give that guarantee, the city is creating a new B&O tax category for “international investment services” that would tax at the rate of 1.5 percent. City officials have said they are not granting a tax break to bring Russell. City Councilwoman Jean Godden said it’s not clear how the firm would have been taxed since the city has no category for the work it provides,
Nickels spokesman Alex Fryer said that the 4.1 percent for service business could have applied, but it would have been difficult figuring out what revenues to tax since the company is comprised on several businesses in different cities, states and countries. “Russell could potentially dispute the taxable amount in litigation. This solution offers clarity for the taxpayer and the city.”
Mallahan said at the debate would have preferred not to create the new tax category. The loss hurts Tacoma, and he’s not sure worried about a “jurisdictional incentives competition,” with cities trying to lure away each others’ businesses,
McGinn didn’t directly answer the question about Russell, instead saying Russell was probably attracted by Seattle’s reputation as a place that attracts the “best and the brightest.” He said the city should be working to reduce taxes.
Asked what they’d do to improve the city’s economy, McGinn and Mallahan gave similar responses – that improving the city would aid businesses. McGinn highlighted improving affordable housing, transportation, schools, public safety and creating a public fiber-optic network.
Mallahan playing off the theme that revisiting the tunnel issue would lead to inaction said he’d keep the city moving forward. “The worst thing we could do for the economy is slow the movement of goods and people through the city.”
Both candidates told the business crowd they’d streamline City Hall, with McGinn saying he’d reduce “political appointees” and eliminate duplication. He said different city departments have their own IT and community outreach staffs. Mainly, he focused on reducing the city’s bill for the tunnel plan, noting the city hasn’t laid out how it would pay for its $930 million of the cost.
Mallahan said he’d look for “sustainable cuts,” adding that asking city workers to take furloughs or losing city libraries for a week were solutions to the city’s budget problems. He said he’d target the use of consultants, who he said are often used to give elected leaders political cover.
He said also that he’d ask department heads what’s working and what’s not and what money is being spent that does not create a tangible product or service. Then he said he’d ask the same of middle managers and frontline workers to see how in touch the department heads are to what’s going on.
On the schools issue, Mallahan said he’d focus on fixing City Hall without taking on the schools’ problems, whereas McGinn said other mayors like Norm Rice have taken leadership in education. Because education is a critical part of the city’s health, he’d create the discussion of whether the current system works.
The candidates generally agreed when asked about incentive zoning, in which developers are allowed to exceed height limits in return for providing amenities to the neighborhood. Both said that outside downtown, the benefits for adding more stories doesn’t provide enough incentives to pay for more sidewalks or plazas. So developers do not build taller buildings, which both candidates said, means more housing units aren’t built. Mallahan said that contributes to the high cost of housing.
Both supported the need for neighborhoods and even unions to work with developers. McGinn, focused on having a predictable policies to guide the relationship between the different parties, instead of treating each development on a case by case basis.
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