by Hunter R. Slaton | May 01, 2008

The Washington State Convention and Trade Center

The Washington State
Convention & Trade Center

In March, Washington’s state legislature approved a plan to fill a state budget gap by assuming control of $65 million of a projected $86 million reserve accumulated by Seattle’s Washington State Convention & Trade Center (WSCTC).

The legislature earmarked $57 million of the appropriation to be given to the state’s general fund, while $8 million will be used for low-income housing. This redistribution will not affect a planned expansion of the convention center into a newly purchased parcel of adjacent land.

According to Don Welsh, president and CEO of Seattle’s Convention and Visitors Bureau, neither his office nor the center knew about the diversion of funds until it was too late. “Our lobbyist read about it at our office and watched it surface on a government TV station,” Welsh said.

The cash reserve was built through a 15.6 percent hotel tax, of which the convention center receives less than half. With this cushion, the center was hoping to accelerate its debt repayment and begin putting away some money to build its own replacement someday.

Welsh was dismayed by the news -- and by the combative tone lawmakers took in justifying their right to the funds. “This is the most illogical, insulting, indifferent decision that’s been made by our state government in my five-plus years in Seattle,” said Welsh.

Senator Margarita Prentice, chairperson of the state’s Ways and Means Committee and a chief sponsor of the bill, did not respond to calls seeking her comment on the matter.

The president and general manager of the WSCTC, John Christison, was more sanguine in his assessment of the situation, recognizing that the state was within its legal rights to sweep the funds.

“Was I thrilled?” Christison asked. “No. But we’re moving on.” He noted that the convention facility is expecting another positive year and hasn’t yet felt any pressure from the economic downturn.

Nevertheless, Christison said, the legislature’s appropriation of the funds “begins to raise a larger, industrywide question: What’s the future for these [taxes]? Are hotel taxes sacrosanct, or should they be used for other purposes?”