Head of Downtown Business Group Lobbied for Digital Kiosk Company; Education Levy Will Help Backfill City's Budget Deficit

Today's Afternoon Fizz.

1. Under an agreement signed earlier this month, the Downtown Seattle Association will get to keep the revenues, estimated at a little over $1 million a year, from 30 digital ad kiosks that a company called IKE Smart City will soon install on downtown sidewalks. Because the agreement itself is private (the city will get no money from the deal, unless revenues exceed expectations), it's hard to say whether the business group got a good deal or if IKE will walk away with the lion's share of the profits.

What is clear is that the relationship between IKE and the Downtown Seattle Association is unusually close: The DSA's board chair, Pacific Public Affairs principal Sung Yang, is a registered lobbyist for IKE. According to Yang's filing with the city in April, he was hired by IKE, along with former deputy mayor Hyeok Kim, to lobby the city on "legislation related to Digital Kiosks."

James Sido, the DSA's communications director, told PubliCola that Yang "didn’t represent IKE in negotiation on DSA’s agreement with IKE. We conferred directly with Clay Collett, senior development director at Orange Barrel Media (the creators and operators of IKE kiosks)." However, it appears that Yang lobbied the city on IKE's behalf while serving as board chair of the DSA. That puts Yang on two sides of the three-way deal, serving as a representative for the digital billboard company and the business group that will receive a share of the revenues from the billboards.

2. The city council voted to put a $1.3 billion Families, Education, Preschool, and Promise (FEPP) levy on the ballot earlier this month. If passes, the levy will increase next year from 36.5 cents per $1,000 of assessed home value to an average of 61 cents per $1,000 over the next six years, starting at 72 cents per $1,000 in 2026. That translates to a price tag of $656 a year for the median homeowner in Seattle, up from $248 under the previous, $619 million levy.

In a press release, Mayor Bruce Harrell described the levy as "transformative," saying it would "make Seattle one of the best cities in the nation to start and raise a family, supporting our children from cradle, to classroom, into college and beyond toward successful careers."

But the levy also includes significant spending—nearly $50 million a year—on programs the city was already paying for out of its general-fund budget, placing services the city has previously treated as fundamental at the mercy of voters. Generally speaking, levies are supposed to be—and are invariably sold as—additive; while the city budget pays for essential services, like fire, police, and a functioning road system, voters decide whether to tax themselves to pay for things like library expansions, sidewalks, and preschool programs.

This year's levy will shift funding for almost 30 programs that are currently being funded by the general fund, the JumpStart payroll tax, and the sweetened beverage tax over to the levy, amounting to a total of nearly $300 million over six years. Here are some of the existing programs for which funding will shift to the education levy to help Harrell and the council close a funding gap that's currently estimated at $250 million over the next two years, along with their current funding sources (all numbers are six-year totals):

• Increased Mental Health Staffing Supports (JumpStart): $42.1 million

• Supporting Youth for Success grants, which provide preemployment skill building and mentorship (General Fund): $26 million

• Youth and Young Adult Behavioral Health (General Fund): $12.7 million

• Nurse Family Partnership (General Fund): $18.8 million

• Online therapy for people between 13 and 24 (JumpStart): $24..7 million

• Developmental Bridge, which provides services to young children with developmental delays (Sweetened Beverage Tax): $4 million

• In-person mental health care for middle and high school students who aren't served by school-based health centers (JumpStart): $16.7 million

A spokeswoman for Mayor Harrell, Callie Craighead, said Harrell alluded to the need to use levy dollars to fund existing programs in his levy announcement, when he said the levy would " lign existing City investments in programs serving the three initiative goals through levy investments to ensure a stable funding source for years to come, maximize program coordination, and drive positive outcomes for Seattle youth."

"The City’s latest revenue projections show an uncertain economic outlook and a reduction in multiple funding sources ... that would impact important upstream investments for Seattle youth and families. Our levy renewal proposal ensures that these priorities have dedicated, consistent funding for the next six years," Craighead said.

Already, she added, state budget reductions have forced the city's Department of Education and Early Learning to use the current levy to fund preschool slots for the 2025 to 2026 school year. "This shows the cascading impact of reductions that we are looking to avoid by having stable funding through the levy." It also suggests the high-level spending plan Harrell rolled out when he proposed the levy may not be what it ends up funding, and that the city could look to the levy to solve its budget problems in the future.