Seattle City Council scales back tax to aid homeless amid Amazon opposition

15 May, 2018, 22:37 | Author: Lora Ball
  • Protesters attend the Seattle City Council finance committee meeting Friday May 11. The committee voted 5-4 to reject Mayor Jenny Durkan’s proposal of a more modest tax on large employers to address the city’s homelessness crisis.(Steve Ringman  The

Amazon and Starbucks both released statements blasting the city council's unanimous decision to impose a $275-per-employee yearly tax on companies that make more than $20 million annually in Seattle.

The city councilors who sponsored the new tax said it was time for the company to pay its fair share. Top-grossing Seattle businesses will be taxed $275 per employee, per hour worked - down from $500 previously - each year for five years.

Supporters and opponents of Seattle's head tax pack City Council chambers for Monday's vote.

The council has been debating the so-called head tax for months, and had been considering a higher tax of $500 per employee that would have raised $75 million a year, largely to build about 1,000 new affordable housing units.

Several members of the nine-person City Council said they were reluctantly voting in favor of the smaller tax because there were not enough votes to override a mayoral veto of the larger tax plan.

Mayor Jenny Durkan said that Seattle now spends about $70 million in annual direct investments to programs that fight homelessness in her first State of the City address.

The head tax has ignited something of an existential debate for Seattle over its monumental growth.

"There is no way this tax will be a burden on big businesses in Seattle", Sawant told The Seattle Times. In Denver, there is a $50-per-year tax for a full-time employee, while Chicago Mayor Rahm Emanuel scrapped the Windy City's tax after calling it a job killer.

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It also includes $2.3 million in revenue to go towards a five-year goal of picking up 950,000 pounds of garbage.

Following the change, Amazon has said it will now continue construction on the new building but is still considering whether to lease space in a second tower. Union construction workers marched on city call to protest the tax, which also drew opposition from business interests.

Herdener then turned the tables, suggesting the people holding the city's purse strings are the problem.

"A tax on jobs at any level is bad economic policy and will negatively impact Seattle's economy and city tax revenues", Downtown Seattle Association spokesperson James Sido wrote in a statement.

About 3 percent of Seattle businesses will be affected and the tax will raise about $47 million per year, according to the council. The Seattle region had the third-highest number of homeless people in the United States and saw 169 homeless deaths a year ago. A new report concluded that it would require about $400 million a year, conservatively, to solve the homelessness crisis in King County.

Amazon, which halted two major expansion projects in Seattle in protest over the larger tax increase, said it was disappointed even with the smaller tax package, although the company said it would restart the planning process for one of its new buildings.

Speak Out Seattle cofounder Elizabeth James said her group wants an independent audit of all city departments, and for the city to better support law enforcement and funding for drug treatment and mental health services. "While we have resumed construction planning for Block 18, we remain very apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here".

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