Seattle Approves Plan for Tax on its Largest Businesses to Help Pay for Housing, Homeless Services

by JSeattle

The Seattle City Council Monday afternoon chose a smaller, simpler, “reasonable” compromise to create a new tax on the city’s largest companies to help pay for affordable housing and homelessness services.

In a 8-1 vote, the council — some reluctantly — chose a new version of the plan introduced as Amendment 24 during the afternoon full council session with sponsorship from eight of the nine members — all save Capitol Hill’s District 3 rep, Kshama Sawant.

“I’ve been really struggling with how I feel about this compromise because I’ve been really, really focused on the spending plan and the dire needs of our communities,” co-sponsor of the original legislation Lisa Herbold said before the vote. But she said she was proud the plan for a new tax had “evolved more towards progressivity” and would do things like protect the city’s small businesses.

Friday, a council committee approved a veto-vulnerable $500/employee version of the tax.

Monday’s $48 million compromise legislation avoids a collision course with a Mayor Jenny Durkan-threatened veto and will implement a $275 per full-time employee tax on companies reporting $20 million or greater in annual “taxable gross receipts,” eliminated the proposed transition to a payroll tax, and gives the tax plan a five-year window after which it will be evaluated and will require new legislation to continue.

Meanwhile, the smaller tax plan will be accompanied by a smaller housing and homelessness services spending plan including enough money to build an estimated 591 affordable units in five years, and around 15 million per year for services including rental subsidies, shelters, “innovative temporary housing,” and more than a million a year for “city-wide sanitation and garbage services such as but not limited to Seattle Public Utilities’ Clean Cities program” —

The approval Monday brought a victory for Lisa Herbold and Lorena Gonzalez, the legislative architects on the plan, and, maybe, some time to finally rest after a weekend of negotiating. At a meeting with Capitol Hill business representatives last week, the duo said that data and expert reports plus their own experiences seeing the streets of the city convinced them that more needs to be invested in addressing Seattle’s housing and homelessness problems. Herbold also said she expects King County and the state will add to Seattle’s effort with increased regional spending on the crisis. “I don’t feel like we’re doing this in a vacuum,” Herbold said Friday.

The legislation was born out of Seattle’s “Progressive Revenue Task Force.”

“The City of Seattle has an obligation to take care of those people who are suffering on our city’s streets,” Gonzalez said prior to Monday’s vote.

According to King County, there are more than 14,000 people living unsheltered here.

The compromise approval — even without a ban on so-called “sweeps” and far from the originally proposed $500 per employee mark, let alone Sawant’s bid for $1,000  — also yielded a major victory to the Socialist Alternative leader and activists calling for large companies to do more to address social issues in the cities in which they do business. “This will be a historic victory,” Sawant told the Capiitol Hill Seattle blog Saturday before she led about 200 protesters in a “March on Amazon.” “This will be seen by every city where Amazon is building towers. But also every city in the United States. Because every city is facing a housing and homelessness crisis.” Now, in five years, the fight in Seattle will begin again.

In the meantime, Amazon, Starbucks, and the other approximately 3% of Seattle businesses that will be dinged in the process have some time to start saving up. The new tax will take effect in 2019.

This article was previously published on Capitol Hill Seattle

3 thoughts on “Seattle Approves Plan for Tax on its Largest Businesses to Help Pay for Housing, Homeless Services”

  1. This is a bare bones start. At about $300,000 per unit, this will build only about 110 new apartments per year, about the same as one building like the new Mercy Housing building at Othello. Of course, this will help multiply other funds (state, federal, etc.) but the real need is to multiply these other funds and to tap into the big money, like Amazon, to do so.

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