The Taxation Trap: How Seattle’s Liquor Licenses Were Feeding the County, Not the City
In 1876, a territorial newspaper railed against a fiscal injustice: Seattle taxpayers were footing the bill for policing and street maintenance, while the county kept the revenue from liquor licenses sold within city limits.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
OUR CITY TREASURY.
Though it is some time from this date to the assembling of the Territorial legislature, yet we hope to see some proper relief made by that body for the maintenance of this city's municipal government. The outside portion of the county bears none of the burden, yet properly owners and taxpayers outside the city limits receive great benefit from the large amount of taxes collected in Seattle.
In every Oregon town incorporated since 1870, the incorporation act specifies that all liquor licenses collected shall be paid into the town treasury instead of the county. This is no more than a proper rule, for the town has to bear the burden of lighting streets and establishing police forces, for the preservation of order and security of life and property. That this expense should be borne wholly by pro rata taxation of citizens' property is unjust in every respect.
Over $7,000 in liquor licenses were collected within city limits during the past year, of which the city received not a dollar but has to pay all the expense of arresting and keeping prisoners who commit offenses while under the effects of liquors sold by permission of the county. Look at that.
We ask Councilman Hartford and Representatives Tibbetts and Foster, to give such legislation as will give to the city treasury one-half the amount collected within the city limits for liquor and beer licenses; also, one-third of the fines collected in courts of first instance, for offences committed within the city limits, the perpetrators of which are arrested by the local police.
The pay of our police is but $100 in scrip for the chief and $50 for the two subalterns. This reduces their actual pay to about $62 and $50 respectively in coin, which is no compensation for any efficient officer. The city is being greatly improved, at considerable expense and needs legislation of this kind.
The county renders her no equivalent for her contribution and the injustice of the present system is apparent to all.
We trust that our Representatives and Councilman will give us the desired relief at the proper time; and till then we can afford to wait.
This 1876 complaint about municipal finance mirrors modern debates over 'unfunded mandates' and intergovernmental fiscal transfers. Just as Seattle then argued it bore the costs of policing and infrastructure without receiving the tax revenue generated by its own businesses, today's cities often struggle with state-level mandates that require local funding for services like homelessness response or public safety.
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