Seattle to axe homeless-aid tax following objection from Amazon

SEATTLE Amazon balked, and Seattle is backing down.

City leaders said they plan to repeal a tax on large companies such as Amazon and Starbucks as they face mounting pressure from businesses, an about-face just a month after unanimously approving the measure to help pay for efforts to combat a growing homelessness crisis.

The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing. It has resulted in one of the highest homelessness rates in the U.S.

Amazon and other businesses had sharply criticized the tax, and the online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.

Mayor Jenny Durkan and seven of nine City Council members said Monday they worked with a range of groups to pass a measure last month that would strike a balance between protecting jobs and supporting affordable housing.

But a coalition of businesses is working to get a referendum on the November ballot to overturn the tax.

In a statement, Durkan and the council members said “it is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.”

They said they would move forward to repeal the so-called head tax. A special council meeting was scheduled Tuesday, where a vote was expected. They didn’t provide a backup funding plan.

Seattle’s tax would charge companies about US$275 per full-time worker each year and raise roughly US$48 million a year for affordable housing and homeless services. It would target businesses making at least US$20 million in gross revenue and take effect in January.

The city spent US$68 million on homelessness in 2017 and plans to spend US$78 million this year.

Just days after Durkan signed the ordinance into law, the No Tax On Jobs campaign, a coalition of businesses, said it would gather signatures to put a repeal referendum on the November ballot. The campaign has raised about US$285,000 in cash contributions, with more employers, including Amazon and Starbucks, pledging nearly US$200,000 in additional support.

The coalition is glad the “Seattle City Council has heard the voices of the people loud and clear and are now reconsidering this illconceived tax,” said John Murray, a spokesman with the No Tax on Jobs campaign.

Councilwoman Teresa Mosqueda, one of four sponsors of the tax, said she could not support repealing it without “a replacement strategy to house and shelter our neighbours experiencing homelessness.”

“We cannot wait months or until next year for another proposal or process while people are sleeping in our parks and on our streets,” she said in a statement.

Councilwoman Kshama Sawant said on Twitter that the repeal “is a capitulation to bullying by Amazon” and other big business and called it a “backroom betrayal” that didn’t involve her office.