Seattle council approves plan for spending on COVID relief, big business tax
The best way to jump start the Seattle economy is to tax big businesses: That’s the mantra of Seattle City Council, having now approved spending from its recently-approved business tax, as well as how to spend its emergency fund to help the city get through the COVID-19 crisis.
The city council approved spending $86 million to provide COVID relief this year; $67 million will come from the emergency fund, while $19 million will come from the rainy day fund. The money will be paid back from the proceeds of the new big business tax, which will begin collecting money in 2021.
This tax is a payroll tax, charging businesses that have over $7 million in payroll on their highest earners. The bigger the employee salary, the bigger the tax on the company: 0.7% for each employee making $150,000 a year, and 2.4% for those making $400,000. It’s expected to raise more than $200 million a year.
Councilmember Teresa Mosqueda authored the plan.
“This is our push back against status quo politics in the middle of a deadly global pandemic,” she told city council. “We are doing something that has proven to invest in our most vulnerable, to spur local economic activity and create a more resilient and equitable economy.”
The “JumpStart Seattle” plan will spend over 60% of the tax revenues on affordable housing and homelessness when it takes effect next year.
“This is what it looks like to lift up the voices of those shut out by establishment politics of the past who listen to community needs who find ways to get to ‘yes,'”Mosqueda said. “This is what happens when we have folks in office who don’t accept the way things have always been, who aren’t going to just give lip service void of action.”
Mayor Durkan and her economic staff asked the council to hold off on approving this spending until it has a better idea of what kind of budget hole the city will be facing in 2021. The mayor called this plan risky, considering that a lawsuit over this business tax could be coming, and depleting the emergency funds this way will leave the city virtually nothing in the bank.
The mayor is letting this tax become law without her signature because the council has a veto-proof majority. The spending authorization was approved by the council unanimously.