A political pivot? Seattle Mayor Katie Wilson embraces corporate partnerships while standing by new taxes

Seattle Mayor Katie Wilson appears to be attempting to reset the conversation around her relationship with Seattle’s biggest corporate employers, attempting to balance Seattle’s progressive tax policies with growing concerns from the business community about the city’s economic competitiveness.

During a recent appearance on The Seattle Channel discussing homelessness and affordable housing, Wilson pushed back on criticism that her policies are driving major employers out of Seattle. Instead, she highlighted ongoing partnerships with companies including Amazon, Starbucks, Microsoft, and T-Mobile to fund housing and homelessness initiatives.

“We are moving forward with our second new large, tiny house build site,” Wilson explained on The Seattle Channel. “That is actually being done in partnership with Challenge Seattle, including Starbucks, including T-Mobile, including Microsoft.”

Wilson pointed to her partnership with Challenge Seattle, a group comprising 23 major employers and organizations, including Boeing, Costco, the Gates Foundation, Microsoft, and Starbucks, as proof that she is working with big business, not against it.

Wilson previously on picket line for striking Starbucks employees

As Mayor-elect, Wilson joined Starbucks employees who were on strike and urged people to boycott the company.

“That is why I am proud to join them on their picket line and proud to say loud and clear, I am not buying Starbucks, and you should not either,” Wilson said before she led a chant: “When workers’ rights are under attack, what do we do? Stand up, fight back.”

Now, as part of the city’s connection with Challenge Seattle, Starbucks and Wilson’s administration are collaborating to build a new large, tiny-house village for people experiencing homelessness as part of her goal to create 4,000 emergency shelter spaces before leaving office.

“I believe that the city’s collaboration with our large corporations to address these problems is very important, and we’re doing it,” Wilson said.

The comments come after renewed scrutiny over Seattle’s business climate and the city’s JumpStart payroll tax on large corporations with highly paid employees. Wilson defended the tax, arguing it helped stabilize Seattle’s finances during the pandemic.

“Without that … we would have been in a world of hurt during the pandemic,” she said, adding that the tax has effectively supported the city budget for years.

The growing string of progressive taxes introduced over the next several years, including JumpStart, the state’s 7% capital gains tax, and 9.9% income tax on millionaires, has sparked strong recent political debate with many companies threatening to leave Washington.

Starbucks moving to Tennessee

This year, Starbucks announced a second corporate location in Nashville, Tenn., that will house 2,000 employees. Tennessee has no income tax and won’t share what, if any, economic incentives it offered the coffee giant to partially relocate. According to a recent Association of Washington Business (AWB) survey, 24% of businesses are considering leaving Washington, up from 17% just last quarter, and 55% say they’re considering moving their personal residence to another state. In Spokane County, which borders Idaho, that number was 67%.

In April, during a Q&A at Seattle University, when asked about the idea of millionaires leaving the state, Wilson replied with a wave of her hand, “I think the claims that millionaires are going to leave our state are like super overblown … and if the ones that leave … like bye.”

That response drew the concern and ire from multiple business leaders and organizations, including AWB.

“That should be deeply concerning,” Kris Johnson, President of AWB, told KIRO Newsradio. “That means they’re not engaging in philanthropic efforts; that means if they’re moving their businesses as well, those businesses and jobs associated with it leave the state of Washington. It’s really crucial tax dollars, and we need every tax dollar to make Washington’s budget in the environment work.”

At the same time, Wilson acknowledged during the Seattle Channel interview that Seattle faces growing competitive pressure from nearby Bellevue, where businesses often face lower operating costs and taxes.

“I don’t think it’s good that it is less expensive to do business in Bellevue than in Seattle,” Wilson said. “We’re going to be taking that into consideration.”

The remarks signal a more pragmatic tone from the progressive mayor as Seattle continues trying to address homelessness, maintain business investment, and compete with neighboring cities for jobs and corporate growth. It appears to be a different, if not fresher stance.

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