As the Seattle City Council continues discussions on a proposed new job tax, regional businesses and labor representatives have responded with a letter to Mayor Jenny Durkan and the City Council protesting that the tax is “poorly timed and dangerous,” and it was signed by more than 600 people representing various industries – including labor unions.
With an expected $100 million in decreased revenue to the city and potentially 65,000-170,000 jobs lost in the Seattle metro area as a result of the COVID-19 response, the conflict over the latest city tax proposal pits against each other two diametrically opposed perspectives regarding exactly what types of policies promote economic recovery. At the April 22 meeting of the city’s Select Budget Committee, Councilmember Kshama Sawant said increased government spending is the correct path, arguing a job tax “is the only thing that is going to help economic recovery.” If approved as written, the tax revenue would in part be redistributed to low-income city residents.
“There is no economic recovery without progressive revenues,” she said.
However, Seattle City Councilmember Alex Pedersen has described it as the “Bellevue Relocation Act.” In a Seattle Times op-ed co-written with Windermere Chief Economist Matthew Gardener, Pedersen warned that “imposing a new tax only in Seattle incentivizes employers to relocate or start up anywhere but Seattle.” Incidentally, the city’s legal counsel has previously encouraged residents who don’t like the city’s new taxes to move to Bellevue.
While Sawant argues that the new tax will plug revenue gaps and dismissed concerns about the impact to employers, the business letter says in fact the measure “could harm the livelihoods of those of us in the business community that have dedicated our professional lives to creating companies that serve our community and our employees.” Although Sawant has framed it as an “Amazon” tax, the tax is expected to affect 800 employers located within the city.
In addition to former Seattle City Councilmember Tim Burgess, the letter was signed by representatives from small and large businesses, as well as local labor unions, including:
- Dick’s Drive-In Restaurants;
- Downtown Seattle Association;
- BNSF Railway;
- IBEW Local 46;
- Seattle Hotel Association;
- Cement Masons and Plasterers Local 528;
- Smart Sheet Metal Workers Local 66;
- OPEIU Local 8;
- IBEW Local 46; and
- Seattle Mariners
An online petition to Durkan in opposition to the tax has also garnered more than 6,000 signatures.
Instead of a new tax, the business letter outlines recommendations for economic recovery that include:
- Regulatory relief to reduce operating costs for small businesses;
- Speed up building permits; and
- Freezing energy rates and allowing payment plans for existing delinquencies.
The Select Budget Committee’s next meeting is April 29.