Seattle committee advances employee tax; Durkan says she can't support it

SEATTLE -- A Seattle city council committee on Friday moved forward with a $500 per employee tax on big businesses to pay for housing and homeless services, despite a last-minute effort to cut the head tax in half, but it might be doomed anyway.

The underlying bill passed the Finance & Neighborhoods committee narrowly with a 5-4 vote, but Mayor Jenny Durkan soon released a statement saying she couldn't support it.

"Working together, we must do everything we can to support and create good family wage jobs – it’s why I support and would sign the alternative proposal offered today by Council President Harrell and supported by three other Councilmembers," Durkans statement reads. "Unfortunately, the bill that passed out of committee hurts workers by stopping these good jobs, so I cannot support it."

The proposal remained largely unchanged after the council rejected several amendments that would have lowered the tax rate or made other major changes.

Under the proposal that advanced out of committee, nearly 600 large employers such as Amazon making at least $20 million in gross revenue would pay about $500 a year per full-time worker. The tax would raise about $75 million annually and switch to a payroll tax in two years.

The ordinance will go to a vote before the full Seattle City Council on Monday.

Alternative plan fails

Durkan on Thursday proposed a smaller plan for a tax on large employers.

“In recent weeks, I’ve heard from thousands of constituents, hundreds of businesses of all sizes, dozens of unions, and advocates," her statement Friday reads. "Seattle wants us to forge common ground on a proposal that builds more affordable housing and brings people off the streets and into safer spaces while continuing to support our small businesses, jobs, and economy.  I will continue to work with Council and remain hopeful that Council will pass a bill that I can sign.”

Durkan said her tax would raise money for homeless services and affordable housing. However, her plan would be half the size of the $75 million per year measure under consideration in recent weeks.

Rather than impose a so-called head tax of about $500 per employee, per year on for-profit companies that gross at least $20 million per year in Seattle, Durkan's proposal would charge $250 per head.

Rather than be replaced by a 0.7 percent payroll tax in 2021, Durkan's tax would remain unchanged for five years and then would need to be renewed.

The money would be used to provide additional shelters and services for the homeless, remove garbage, waste and needles from the streets and build new affordable housing.

Durkan's alternative plan was voted down during Friday's committee meeting. If the ordinance passes full council on Monday, Durkan still has the option of vetoing it unless the ordinance passes with a 2/3 majority.

City Councilmember Kshama Sawant -- a vocal supporter of the currently proposed head tax -- came out strongly against the Durkan substitute Thursday night.

Q13's Brandi Kruse sat down with Sawant on Q13 News This Morning for an in-depth interview on the proposal, which she has fought to have passed.

Chef Ethan Stowell of Ethan Stowell Restaurants is among those concerned about the impact such a tax could have. He also joined Q13 News This Morning to respond to accusations from Councilwoman Sawant that the business community is not doing enough to pull Seattle out of its affordability crisis.

Seattle Building Trades executive secretary Monty Anderson says construction would resume if the compromise deal moves forward, according to his conversation with Amazon on Thursday.

Amazon announced last week it was pausing construction downtown pending a vote.