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Employee head tax fails in Seattle Council vote

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Seattle City Council

This article originally appeared in KING 5 on Nov. 14, 2017.

A proposed employee head tax failed in the Seattle City Council on Tuesday.

The tax failed 5-4, with Council President Bruce Harrell casting the deciding “no” vote. Councilmembers Rob Johnson, Lorena Gonzalez, Sally Bagshaw, and Debora Juarez also voted no.

However, multiple councilmembers said they are willing to discuss options on an employee head tax in the future.

The tax, which was spearheaded by Councilmember Mike O’Brien, proposed businesses with over $5 million in taxable gross receipts be taxed $100 per full-time employee. It could have raised $25 million for homeless and housing services, according to O’Brien.

More than 90 businesses came out against the proposal, including Bartell Drugs, Ivar’s, and Tom Douglas. Mayor Tim Burgess has also said he opposed the tax.

The councilmembers all expressed their opinions during the course of a nearly four hour budget hearing.

“I don’t believe this tax is transformational,” Juarez said. “I don’t think it’s unique or an opportunity.”

Councilmembers Gonzalez and Kshama Sawant sparred during the meeting, with Gonzalez visibly shaking her head as Sawant railed against her.

Gonzalez called the proposal a “mish-mash of strategies”, to wish Sawant replied, “This whole question is a mish-mash, not thought out.  Where were you the last three to four weeks when we talked about this?”

Sawant went as far as to label Gonzalez and Bagshaw as being part of “corporate politics.”

“The main reason corporate politicians push for delays is they hope the energy of the movement will dissipate,” she said.

Sawant also did not spare any kind words for the new administration.

“I have no intention of punting to someone like Jenny Durkan,” Sawant said.

The Downtown Seattle Association released a statement in response to the vote, saying, “Homelessness continues to be an urgent humanitarian crisis in Seattle, and there’s widespread agreement that we need a more effective approach to funding services and ultimately solving this issue. The recent proposal by members of the Seattle City Council to tax jobs in order to generate more money for homelessness services was not – and is not – the answer. The proposal did not support broader strategies and expert recommendations. Moreover, it was developed hastily, with no input from the business community. Businesses, including the 90-plus that signed a letter to the council urging them to defeat this proposal, stand ready to assist with comprehensive solutions for getting our homeless into stable and permanent housing.”

Kevin Clark, of Argosy Cruises, also expressed relief with the vote, noting his company could have had to pay an additional $8,000 a year in taxes, based on the proposal’s math. “It would have made it very expensive” to operate a business in Seattle, he said.

“(I’m) not sure what the solution is, but I know the City for the first time in a long time, is flush with cash,” Clark said.