Durkan: ‘I cannot support’ council’s head tax bill

The Seattle City Council’s Finance and Neighborhoods Committee voted down an amendment to a proposed head tax that would have slashed the amount businesses would have paid in half, and approved the original bill that would tax big businesses $500 per employee, per year.

The original bill was approved 5-4, which does not make it veto-proof from the mayor. Council members Gonzalez, Herbold, Mosqueda, O’Brien, and Sawant voted for the bill.

In the wake of the vote, Seattle Mayor Jenny Durkan released the following statement indicating that she may not sign the head tax into law if it passed the council next week:

I spent the morning with hundreds of women attending a career fair for women in the building trades. These women are dynamic and powerful and from some of our most disadvantaged communities. The apprenticeship programs and jobs they want provide strong wages, benefits, and careers. Working together, we must do everything we can to support and create good family wage jobs – it’s why I support and would sign the alternative proposal offered today by Council President Harrell and supported by three other Councilmembers. Unfortunately, the bill that passed out of committee hurts workers by stopping these good jobs, so I cannot support it.

In recent weeks, I’ve heard from thousands of constituents, hundreds of businesses of all sizes, dozens of unions, and advocates. Seattle wants us to forge common ground on a proposal that builds more affordable housing and brings people off the streets and into safer spaces while continuing to support our small businesses, jobs, and economy.  I will continue to work with Council and remain hopeful that Council will pass a bill that I can sign.

Amendment fails

KIRO Radio’s Mike Lewis reports Council President Bruce Harrell’s amendment to cut the head tax in half — supported by Mayor Durkan — failed with four votes.

The council is attempting to reach a deal on the proposed employee head tax that seeks to raise $75 million annually to combat the city’s growing issue with homelessness. A full council vote could come early next week.

Sawant, who is strongly in favor of the original bill, warns “the fight isn’t over.” Along with having to get it through full council, Sawant says Durkan has “promised” to veto the bill. Minutes after the bill passed in committee, Sawant urged the council members who approved it to “stand strong and call Durkan’s bluff.”

If the council can’t find an alternative solution, Lewis reports a veto from Mayor Durkan is possible.

Watch the entire meeting here.

Key details

• The existing legislation would charge companies earning a gross revenue higher than $20 million annually approximately $500 per employee per year.
• Mayor Jenny Durkan, at least two council members, the business community, and construction trade unions oppose the legislation.
• Durkan supported an amendment that would have cut the tax in half, taxing businesses $250 per employee, per year to raise around $40 million a year. It also would not convert to a payroll tax in 2021, but instead sunset in five years.
• The substitute amendment had the support of council members Bagshaw, Harrell, Juarez, and Johnson.
• Friday’s committee meeting was the third special session on the current legislation.
• Five council members, Kshama Sawant, Mike ‘O’Brien, Lisa Herbold, Teresa Mosqueda and Lorena Gonzalez sponsored the original legislation.
• Four council members — Sally Bagshaw, Bruce Harrell, Debora Juarez, and Rob Johnson — don’t support it in its current form.

More background

The existing legislation would charge companies earning a gross revenue higher than $20 million annually approximately $500 per employee per year. For a company such as Amazon, this would mean an additional $20 million in city taxes. In all, about 480 firms likely would be subject to the tax. The money is targeted for emergency services, temporary shelters and low-income housing.

RELATED: Seattle head tax 101

The proposal set off an immense reaction across the city with homeless advocates lauding it as part of the antidote to fix a problem they say was created, in part, by those same companies and the high-wage jobs that contributed to a loss of affordable housing. Business leaders, including a group of 130 tech companies, have called it unfair and a potential job-killer. They have argued that the city shouldn’t penalize success and it should spend the money it has more wisely and try to first solve the problem through favorable zoning that would allow the building of thousands of additional housing units.

The issue garnered national attention when Amazon halted construction of a 40-story skyscraper until the city council decides the issue.

So, in Friday’s meeting….

The Finance and Neighborhoods Committee is holding its third special session on the existing legislation which is opposed by Mayor Jenny Durkan, at least two council members, the business community, and the construction trade unions.  Five council members, Kshama Sawant, Mike ‘O’Brien, Lisa Herbold, Teresa Mosqueda and Lorena Gonzalez sponsored the legislation. Four council members — Sally Bagshaw, Bruce Harrell, Debora Juarez and Rob Johnson — don’t support it in its current form.

Working through the mayor’s office, Amazon and other business leaders will push for an amended proposal that would greatly reduce the head tax in the range of $250 per employee; sunset in two to five years and change the emphasis on spending to include more money for dormitory-style tents that could get hundreds of people into shelter more quickly.

Sources have said that possibly two supporters of the current legislation — Mosqueda and Gonzalez — might be open to modifying the existing bill. Amazon is said to be willing to resume construction if the deal moves to the full council and is approved.

The votes are critical. The committee isn’t likely to move legislation that can’t pass the full council and have the support of the mayor. While the existing legislation did have five votes early in the week, it does not appear to have a sixth — the number necessary to make it veto proof. With Mayor Durkan saying she opposes the current legislation, the pressure has increased to get a more modest measure through the committee and to the council for a vote on Monday.

If the committee can’t reach a deal, Friday, a vote might be pushed back a week while negotiations continue.

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