Seattle officially repeals tax on companies like Amazon, Starbucks

Irving Hamilton
June 13, 2018

Tuesday's vote is a stunning turnaround for the elected leaders, who were facing strong headwinds to actual implementation, and a likely referendum in the fall.

Daniel Malone, executive director of the Downtown Emergency Service Center, also questioned where the city will find the money to fund those beds in 2019 and beyond. They planned to submit the signatures Tuesday in hopes of getting it placed on the November ballot.

Mayor Jenny Durkan and seven of nine City Council members said Monday they worked with a range of groups to pass a measure last month that would strike a balance between protecting jobs and supporting affordable housing.

City leaders wanted the revenue to address the city's growing homelessness and housing problems, but the city's largest businesses spoke up against the tax.

Several council members, including three who sponsored the legislation, lamented the about-face even as they supported repealing the tax.

"It was not a tax on jobs", she said, calling it "a much needed down payment to our housing crisis".

"People who say we are bowing to political pressure - nothing could be further from the truth", Herbold said. It came as momentum was building for a referendum drive against the measure, just weeks after it was unanimously adopted by the council and signed by the mayor.

"I think this is problematic enough and Amazon has shown enough troubling behavior that I would drop out" of the running for HQ2, Richard Florida, an urban expert at the University of Toronto's Martin Prosperity Institute, told The Hill.

There is no "Plan B" immediately known.

"I'm in a position where I will vote to repeal this", said councilmember Mike O'Brien. "This is a cowardly betrayal of the needs of working people".

But a one-night count in January found more than 12,000 homeless people in Seattle and the surrounding region, a 4 percent increase from the previous year. There is the potential that council members could re-address spending in the fall budget cycle, although, with re-election campaigns due to kick off shortly after, and given the toxic nature of the issue, it appears on the surface to be a risky proposition. The head tax would target big businesses such as Amazon, imposing a tax of $275 per employee, per year.

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The council meeting before the repeal vote was raucous, with some public speakers decrying what they called a rushed capitulation without public hearings, and others in support of the repeal saying their uprising against the council was just beginning.

With Amazon and Starbucks funding a ballot challenge to repeal the tax, the city's Democratic council struck down the tax levy they approved about four weeks ago. "We are deeply committed to being part of the solution to end homelessness in Seattle and will continue to invest in local nonprofits like Mary's Place and FareStart that are making a difference on this important issue".

Tuesday's vote comes as the "No Tax on Jobs" campaign was poised to turn in signatures this week to put a referendum on the November ballot.

Ultimately the repeal campaign got more than 45,000 signatures.

The campaign also raised almost $300,000 by the end of May but spent most of the contributions on the signature drive. "The city does not have a revenue problem - it has a spending efficiency problem", Herdener said after the initial head-tax vote.

"We heard you", the city's statement said. "Together we must work to bring families inside, once and for all". "So, where is that money going to come from if we don't have the courage to take it?" Local lawmakers had passed the bill last month despite a rare public rebuke from e-commerce giant Amazon, the city's dominant private employer, which paused its expansion plans in the city pending the outcome of the vote.

"The opposition has unlimited resources", she added.

It's literally a matter of life or death for the people I work with.

"We need the money".

Seattle tried raising money a year ago by passing an income tax on its wealthiest residents. The city declared a state of emergency over its homeless population in 2015.

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