Seattle OKs tax on large firms to help ‘homeless’
Amazon, Starbucks rap move
SEATTLE, May 15, (AP): Seattle’s largest businesses such as Amazon and Starbucks will have to pay a new tax to help fund homeless services and affordable housing under a measure approved by city leaders.
The City Council unanimously passed a compromise plan Monday that taxes businesses making at least $20 million in gross revenues about $275 per full-time worker each year — lower than the $500 per worker initially proposed. The so-called “head tax” would raise roughly $48 million a year to build new affordable housing units and provide emergency homeless services.
The debate over who should pay to solve a housing crisis exacerbated by Seattle’s rapid economic growth comes after weeks of tense exchanges, raucous meetings and a threat by Amazon, the city’s largest employer, to stop construction planning on a 17-story building near its hometown headquarters.
Amazon, Starbucks and business groups sharply criticized the council’s decision after Monday’s vote. They called it a tax on jobs and questioned whether city officials were spending current resources effectively. One state Republican leader said he would seek legislation next year to make clear that a city tax on employees, wages or hours is illegal.
Seattle-based Starbucks had harsh words for its hometown leaders. It accused the city of spending without accountability while ignoring that hundreds of children sleep outside.
“If they cannot provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction,” Starbucks’ John Kelly said in a statement.
But worker and church groups and others cheered the tax as a step toward building badly needed affordable housing in an affluent city where the income gap continues to widen and lower-income workers are being priced out.
“People are dying on the doorsteps of prosperity. This is the richest city in the state and in a state that has the most regressive tax system in the country,” said councilmember Teresa Mosqueda, who wanted a larger tax but called the compromise plan “a down payment” to build housing the city needs.
For Seattle’s liberal City Council, the discussion Monday centered not so much on whether there should be a head tax but how big it should be. Four bill sponsors initially pitched a tax of $500 per full-time employee a year but a compromise proposal emerged over weekend after they couldn’t muster the six votes needed to override a potential veto by Mayor Jenny Durkan.
Councilmember Lisa Herbold, a bill sponsor, said the revenue isn’t enough to fully address the problem given the city’s dire needs and human suffering but it was “the strongest proposal” they could put forward given the veto threat.
Proponents of the tax say too many people are suffering on the streets, and while city-funded programs found homes for 3,400 people last year, the problem deepens. The Seattle region had the thirdhighest number of homeless people in the US and saw 169 homeless deaths last year. The city spent $68 million on homelessness last year and plans to spend even more this year. The tax will provide additional revenue.