Seattle council heading toward employee-hours tax repeal

Seattle City Council president Bruce Harrell has called a special Tuesday meeting to vote on repealing the contentious employee-hours tax, almost a month after the council unanimously approved it.

The special meeting was announced on Monday, and followed by a statement by Mayor Jenny Durkan and a majority of city councilmembers.

“In recent months, we worked with a range of businesses, community groups, advocates, and working families to enact a bill that struck the right balance between meaningful progress on our affordability and homelessness crisis while protecting good, family-wage jobs,” a portion of the statement reads. “Over the last few weeks, these conversations and much public dialogue has continued. It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis. These challenges can only be addressed together as a city, and as importantly, as a state and a region.”

A No Tax on Jobs coalition began a signature-gathering campaign following passage of the new employee-hours tax, more commonly referred to as a head tax, after its passage. Leaders in that campaign have been claiming in recent days that they’ve exceeded the number of signatures required to place a referendum on the November ballot by the June 14 deadline.

The head tax, passed on May 14, was already a compromise on the originally proposed $500 per full-time equivalent tax that a company claiming more than $20 million in gross receipts in Seattle would have had to pay, shrinking down to $275 per FTE. This compromise was reached after Durkan made it clear she would not support a $500 head tax, and the council did not have enough votes to veto-proof the original legislation (5-4).

Amazon provided $350,000 to the Civic Alliance for a Sound Economy — which is sponsored by the Seattle Metropolitan Chamber of Commerce — that went toward Durkan’s mayoral campaign. The chamber has been a strong, vocal opponent of the head tax.

The $275 head tax was expected to generate around $47 million in new revenue to address mounting affordable housing and homeless services needs —60 and 40 percent, respectively.

Big businesses, which includes Amazon, Starbucks, Vulcan and Kroger, contributed $350,000 to the No Tax on Jobs’ war chest, which was used to hire signature gatherers for the anti-head tax campaign.

The only councilmembers to not sign on to the Monday afternoon statement that seems to favor repealing the head tax were Kshama Sawant and Teresa Mosqueda.

Sawant, who had wanted a head tax that generated $150 million per year, tweeted Monday that the council would repeal the tax on Tuesday, stating this “backroom betrayal” was planned over the weekend and without notifying her office. She called the planned action by the council “capitulation to bullying by Amazon” and other big businesses.

“My office has heard a lot of concern regarding the Employee Hours Tax (EHT),” said Mosqueda in a written statement released Monday afternoon. “I have concerns as well, but I cannot back a repeal without a replacement strategy to house and shelter our neighbors experiencing homelessness.”

The statement provided by Durkan and seven councilmembers does not propose a new revenue source to replace the $47 million head tax that would have taken effect in January, but concludes that “Seattle taxpayers cannot continue to shoulder the majority of costs, and impacts.”

The 2018 Count Us In report, released on May 31, shows a 4-percent spike in people experiencing homelessness in King County — 469 more than counted last year — and 15 percent more living unsheltered than in 2017. People living in vehicles increased 46 percent, according to the report, and people living in transitional housing decreased 17 percent.

The total number of people living unsheltered in Seattle counted on Jan. 26 was 4,488, up from 3,841 in 2017.

“There’s a lot of conversation about looking at other solutions,” Mosqueda said in her June 11 written statement. “The reality is, we’ve looked at a lot of them. I participated in the countywide ‘regional approach’ through One Table — a group that’s been indefinitely paused. We worked on a payroll tax option and moved away from it at the request of the a(stet) few large businesses. We also paused revenue efforts last year to create a task force comprised of members of the business community and housing advocates — an effort that was boycotted by several larger corporations. I cannot support repeal of the EHT without a similarly sized progressive revenue option.”

Councilmember Lorena González issued her own statement on Monday, where she said she believes the employee-hours tax was “an appropriate policy choice,” but later on proposed guiding principles for finding new funding and regional solutions as “the City of Seattle looks to a reset…”

“It was my sound belief that a compromise on this policy had been reached with business,” reads a portion of González’s statement, “and as elected official representing all of Seattle, I am deeply disappointed that certain members of the business community did not engage in good faith with the City of Seattle. Instead, they chose to double-down on polarizing the issue of homelessness and fostering divide amongst Seattle residents.”

González’s statement ends with an invitation to business leaders to collaborate on identifying alternative revenue sources.