Seattle businesses decapitate head tax

Seattle businesses decapitate head tax
After intense backlash from the business community, the Seattle City Council voted to repeal a $275-per employee head tax following a rowdy Tuesday special meeting. Photo: Vmenkov

Following a rowdy public comment period and unruly attendees, the Seattle City Council voted at a Tuesday special meeting to repeal the ordinance that provoked a strong backlash from a business community already saddled with other new local regulations and taxes.

The 7-2 vote approved a measure rescinding the $275-per employee tax, which the council had unanimously approved a month prior in order to fund homelessness programs – a move which soon drew the national spotlight. The meeting was preceded by a Monday announcement by Council President Bruce Harrell signaling the repeal, as well as a joint statement issued by Mayor Jenny Durkan and Councilmembers Sally Bagshaw, Lorena Gonzalez, Lisa Herbold, Rob Johnson, Debora Juarez, and Mike O’Brien.

“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,” the statement read. “These challenges can only be addressed together as a city, and as importantly, as a state and a region.”

In a separate statement, Councilmember Teresa Mosqueda said she opposed repealing the tax because the ordinance offers no alternative revenue source. “I regret that it appears that powerful and well-resourced interests have swayed public opinion to believe that more is not needed.”

No Tax on Jobs Coalition Spokesman John Murray wrote prior to the vote that the campaign “appreciates that the Seattle City Council has heard the voices of the people loud and clear and are now reconsidering this ill-conceived tax.”

Though job tax supporters portrayed it as only affecting large companies such as Amazon, CEO Denise Moriguchi of grocer Uwajimaya told the council that “this head tax is not the right answer. Taxing small business…will impact prices, will impact jobs, and that’s not the right answer.”

Prior to the Monday announcement, Lens reached out to all state lawmakers representing legislative districts located in Seattle requesting comment on both the head tax and referendum.

Sen. Reuven Carlyle (D-36) wrote in an email that “I have opposed the head tax since it was announced as I don’t believe the city has made the case that the incremental dollars will lead to meaningful incremental improvements in the homelessness crisis. We need the state and region to step up to help Seattle with the concentration of homeless individuals and families within the city’s borders. Homelessness is regional by nature and we need more coordination and sharing of the costs before new revenues.”

Sen. Jamie Pedersen (D-43) wrote: “I’m glad that the Council plans to repeal the head tax.”

Rep. Ruth Kagi (D-32) declined comment.

The Monday announcement by a majority of the council came as a surprise to some on both sides. The referendum campaign had initially intended to deliver the 45,000 signatures gathered to the city clerk earlier in the week, but delayed it until the Tuesday vote. In a tweet, Councilmember Kshama Sawant wrote “this backroom betrayal was planned over weekend w/o notifying movement (incl. my office).”

One unique dissenting view expressed at the meeting was frequent initiative sponsor Tim Eyman, who told councilmembers that the repeal deprives voters of the chance to make their voices heard at the ballot box in November. In an email he wrote: “It’s not fair to rob the 50,000 petition signers of their right to vote. It’s not even fair to the people who didn’t sign petitions to rob them of their chance to vote. Everyone’s voice deserves to be heard.”

Statements made by Herbold at the meeting prior to the vote indicate the council believed the referendum was likely to be successful. “The margin is simply too great to overcome.”

That attitude was reflected in other councilmembers’ comments.

“Various components of our community have the power to stop things,” O’Brien said. “We need people to come together to actually solve things.”

Gonzales said: “It gives me no pleasure to have to repeal this law, because I think this law was well done.”

1 COMMENT

  1. Your headline, “Seattle businesses decapitate head tax” does not match your accurate story, that the decapitation was the result of a grassroots effort. Over 40,000 Seattle residents across the political spectrum signed the petition. Thank you.

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