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Council calls special meeting to vote on repeal of Seattle’s head tax

SEATTLE -- The Seattle City Council will hold a special meeting Tuesday to discuss a possible repeal of a controversial tax on big businesses.

The city’s employee tax, which was unanimously passed by the city council last month, would charge big businesses in Seattle $275 annually and raise $47.5 million dollars over five years to combat the homeless crisis.

According to a news release from the city, a vote is expected to take place during the special meeting:

"The legislation will repeal Ordinance 125578, passed on May 14, 2018 and signed by the Mayor on May 16th. This new ordinance will repeal the Employee Hours Tax that would have otherwise taken effect on January 1, 2019."

Seattle Mayor Jenny A. Durkan, Council President Bruce A. Harrell, Councilmembers Sally Bagshaw, Lorena Gonzalez, Lisa Herbold, Rob Johnson, Debora Juarez, and Mike O’Brien released the following statement:

“We know that there are strong passions and genuine policy differences between neighbors, businesses, community leaders, and people across our City on how to best address our housing and homelessness crisis. This crisis has been years in the making and there are no easy solutions. The crisis is tied to a range of complex causes, including lack of affordable housing, unmet mental health and substance abuse issues, and systemic racial disparities in our foster care, criminal justice and educational systems.

“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. 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. 

“We heard you. This week, the City Council is moving forward with the consideration of legislation to repeal the current tax on large businesses to address the homelessness crisis.

“The City remains committed to building solutions that bring businesses, labor, philanthropy, neighborhoods and communities to the table. Now more than ever, we all must roll up our sleeves and tackle this crisis together. These shared solutions must include a continued focus on moving our most vulnerable from the streets, providing needed services and on building more housing as quickly as possible. The state and region must be full partners and contribute to the solutions, including working for progressive revenue sources. Seattle taxpayers cannot continue to shoulder the majority of costs, and impacts.”

The two councilmembers not named in the announcement are Kshama Sawant and Teresa Mosqueda.

On Twitter, Sawant called for "urgent action."

"@SeattleCouncil will repeal the tax on big biz at noon tomorrow! This is a capitulation to bullying by Amazon & other big biz. This backroom betrayal was planned over weekend w/o notifying movement (incl. my office)."

Later Monday afternoon, however, Gonzalez released a statement saying in part "I continue to believe that the Employee Hours Tax was an appropriate policy choice to fund additional housing and human services for people experiencing homelessness."

Last weekend, the group No Tax on Jobs celebrated after the organization says it gathered enough signatures to put Seattle's head tax on the November ballot, leaving the fate of it in voters' hands.

The group needed to gather 17,000 signatures by June 14. They say they’ve far surpassed that number already.

Starbucks released a statement Monday evening.

“Repeal makes sense," said John Kelly, Starbucks' senior vice president of public affairs. "The best path forward is to implement the reforms recommended two years ago by the city’s own homelessness expert.  Starbucks remains a committed partner to government officials, business leaders, and family service providers.  Together we must work to bring families inside, once and for all.”

City officials say the head tax dollars would help clean up the streets. The latest numbers show 12,112 people are experiencing homelessness in King County.

“That allows us to get money in the door immediately to build the housing that we need,” said Councilmember Teresa Mosqueda.

But council members also know people are frustrated.

“Now we have to prove to the public that we’re investing wisely and strategically and openly, I don’t think we convinced the public on that,” said Councilmember Bruce Harrell.

Here's Gonzalez's entire statement:

“Our tax system is upside down, placing the burden on low-income and middle-class households to pay a disproportionate share of taxes -- as compared to corporations -- to fund basic human needs.  That is why I continue to believe that the Employee Hours Tax was an appropriate policy choice to fund additional housing and human services for people experiencing homelessness. I regret that it appears that powerful and well-resourced interests have swayed public opinion to believe that more is not needed.

“Our region has experienced the highest rates of economic growth in the country, and while this has been good for the wealthy, our region’s working-class families continue to be shut out of accessing shared prosperity.

“I am deeply troubled and disappointed by the political tactics utilized by a powerful faction of corporations that seem to prioritize corporations over people.  The consequences of delaying action will be felt most profoundly by the thousands of people currently suffering while seeking stable housing and emergency shelter in our City.

“Over the past eight months, I worked with my colleagues, the Mayor, service providers, employers and housing advocates to identify solutions and strategies that would make an appreciable difference in sheltering and housing our growing homeless population. As the City of Seattle looks to a reset, I believe that our next steps should be immediate and guided by the following principles:

  1. We must act with urgency in addressing the homelessness crisis by treating it as a large-scale humanitarian crisis.
  2. We must continue our regional collaboration to implement system-wide improvements but acknowledge that the City of Seattle is home to over 70% of King County’s homeless residents. Any regional approach must prioritize the urgent needs of those currently experiencing homelessness in Seattle.
  3. We must generate significant additional revenue that will not burden residential property owners, renters or consumers, who already pay their fair share of taxes to fund human and housing services. This will require a deep and real commitment to finding new resources from all government levels, for-profit corporations and philanthropy.

“It was my sound belief that a compromise on this policy had been reached with business, and as an 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.

“For civic and business leaders who are truly committed to concrete, progressive solutions to get our neighbors housed now, I welcome good-faith and urgent collaboration to identify revenue sources to accomplish our common goals.”