Almost two years after opposing a job tax in Seattle that later was rescinded by the City Council with another local business tax possible, companies like Amazon are now supporting a bill that would allow the King County Council to impose a job tax to fund homeless shelter programs. However, numerous local government officials testifying at a Feb. 4 public hearing in the House Finance Committee said they’ve been kept completely out of the loop on the proposal.
HB 2907 sponsored by Rep. Nicole Macri (D-43) would allow the county to place a .01-.02 percent tax on an employer’s payroll expense, with the possibility of a graduated rate based on income levels. The taxing authority would only apply to counties with more than two million residents. Deductions would be permitted for employees that make less than $150,000 annually. The bill exempts small businesses that have less than 50 workers and pays less than half of those workers under $150,000 annually. Grocery store workers would be exempt from the tax, though Rep. Jesse Young (R-26) remarked, “we should make the carve-out bigger.”
The bill provides a list of permittable service programs to fund with the job tax revenue. Of that money, 43 percent must be given to the city with the highest homeless population; Seattle currently has not only the highest homeless population in Washington state but also the third highest in the nation. The remaining 57 percent of revenue is to be distributed elsewhere in the county. The bill also permits cities and King County from bonding future job tax revenue.
“It’s a proposal that seeks to balance the flexibility we know our local elected officials need to design a well-informed strategy while being both clear and direct in the intent of the legislature,” Macri told the committee. “A city-by-city approach won’t cut it.”
However, testimony from some local government officials suggested the proposal wasn’t the product of regional collaboration with all stakeholders.
“The city of Kent and many other cities in King County were not included in any of the conversations that led to the introduction of this bill,” Kent Mayor Dana Ralph told the committee. “And yet the bill imposes taxes on our communities – on the businesses that provide jobs to our residents.”
Auburn Mayor Nancy Backus said her community was also kept in the dark about the bill. “There was no one outside of Seattle that we are aware of that was consulted on this, and now we’re left to scramble to determine what effect this will have on our community.”
Companies supporting the bill include Amazon, Alaska Airlines, Microsoft and Starbucks.
Expedia government affairs manager Richard De Sam Lazaro said: “this bill allows regional leaders to consider raising resources from large, high-wage businesses like ours to help fund comprehensive county-wide work. Funding alone will not solve the housing and homes. The accountability and oversight provisions in this bill are critical to our most vulnerable neighbors because we owe it to them to make the most out of every dollar.”
Mel Sorensen with First American Property and Casualty Insurance Group warned that such a tax “is a crippling competitive disadvantage to those insurers, and it’s not one that perhaps the committee was thinking about when the bill was put together. Insurers have never been subject to taxes at the local level, and we think that this is a bad precedent.”
The bill is scheduled for executive action on Feb. 7.