Can you say ‘fungibility’? Sure. I knew you could.
Everyone involved with the fighting the Port Of Seattle should learn this word because it’s key to understanding the Port’s operations and their whole set of lame excuses as to why they can’t provide airport communities with mitigation and relief from the noise and pollution.
Money is, in general, considered to be a ‘fungible’ type of asset, meaning that if I give you $10 you can spend it pretty much anywhere and everyone will happily accept that $10 as payment. An example of non-fungible assets are store coupons which have a dollar value but can only be used at the store from which they were issued.
At the Port Of Seattle all of their various sources of revenue are definitely not fungible. Many of their sources of revenue must, by law, only be used for particular purposes. This lack of fungibility is meant to keep your government (the Port) honest. For example, don’t you wish that tax dollars allocated for schools could only be spent on schools instead of getting redirected to lawmakers’ pet projects as so often happens? That’s the kind of abuse this was meant to prevent.
FAA law says that the Port Of Seattle cannot use money from airport operations revenue in any way outside of the airport. Really. For example the Port can use airline revenue to fix the tarmac, but not to pay nearby residents for triple-pane windows. That is one reason why the Port’s Inter-local Agreement (ILA) with the City Of SeaTac has such a complicated fee structure. It’s based on parking fees and other sources of revenue at the airport, but not on revenue derived directly from airline flights.
For years, the Port has used this lack of fungibility as one of its all-purpose excuses for not providing mitigation help or being willing to negotiate on issues of noise and pollution. There is a patronizing and condescending attitude that comes into play, essentially, “Sorry, this is all very complicated financial stuff. You wouldn’t understand it. But trust us on this, we’d like to help, really we would, but our hands our tied.” The technical term for this attitude being horseshit.
In fact, if the Port wanted to, it has many available tools to help airport communities, limited only by the imagination of a creative finance department. For example, as a Port District under Washington State RCW Title 53, the Port Of Seattle is a taxing authority. So there is nothing stopping the airport from taxing King County residents to provide a fund for airport communities. In fact, they already do exactly this. It’s called the Tax Levy and it’s scheduled to bring in $74 million in 2019. Unfortunately, until the last minute of this year’s budget none of that money has ever been used for mitigation.
What they do use that Tax Levy money for is mostly to pay off their own bond debt. What are those bonds for? Why they are for construction, either to expand Sea-Tac Airport or the Seaport or in their role as developers in Seattle. However, they could just as easily redirect that Tax Levy to us in the form of mitigation money. Because that Tax Levy money is 100% fungible.
Yes, we know about Commissioner Peter Steinbrueck’s last minute resolution 2018-14 to allocate $25 million over five years to the airport communities. Read the fine print. Less than $375,000 is actually allocated for noise abatement–and even that is not described with any specificity. Some might see this as ‘a great first step’, while others might view it more as a drop in the bucket after a lot of badgering by activists. More on this to come.
Now the Port also has lots of other sources of fungible revenue which could act as potential sources of mitigation money for airport communities. One just has to think about their entire river of money and not only in terms of their airport tributaries. It’s simply a matter of having the will to look at the Maritime and other areas of their businesses. The bookkeeping is almost of secondary concern because as we often point out, the Port has the least number of layers of bureaucracy of any governmental agency in the State Of Washington. The Commissioners literally have only to vote on a new Resolution at one meeting and in the time it takes to draw up the legal language, it starts happening. (Where else in this region of ‘Seattle Process’ is that even imaginable?)
But if one insists on getting all democratic about it: there is also nothing preventing King County from enacting a tenth of a penny sales tax on airline tickets or on other purchases made inside Sea-Tac Airport–the proceeds of these taxes to be used for mitigation for airport communities. Such a tax would be almost unnoticeable to airport consumers, but would add up to tens of millions of dollars for airport communities. Of course, that would require the approval of King County voters–which would mean some serious campaigning.