After Amazon fights back, Seattle repeals tax raising money to fight homelessness

SEATTLE — Seattle leaders on Tuesday repealed a tax on large companies such as Amazon and Starbucks after a backlash from businesses, a stark reversal from a month ago when the City Council unanimously approved the effort to combat a growing homelessness crisis.

Drew Herdener, an Amazon vice president, said that the company is “deeply committed to being part of the solution to end homelessness in Seattle.”

City leaders underestimated the frustration and anger from residents, businesses and others over not just a tax increase but also a growing sense that homelessness appears to have gotten worse, not better, despite Seattle spending millions to fight it. It poured $68 million into the effort last year and plans to spend more this year. The tax would have raised $48 million annually.

But a one-night count in January found more than 12,000 homeless people in Seattle and the surrounding region, a 4 percent increase from the previous year. The region saw 169 homeless deaths in 2017.

Many supporters called the repeal a betrayal and said the tax was a step toward building badly needed affordable housing.

They booed council members, imploring them to keep it and fight a coalition of businesses trying to get a referendum overturning the tax on the November ballot.

Several leaders, including three who sponsored the legislation but voted to repeal it, lamented the reversal and conceded they didn’t have the resources to fight the referendum.

Councilwoman Lisa Herbold said it “was truly our best option” and that she repealed it with a heavy heart. She lashed out at business interests for blaming the problems on government inefficiencies.

She and others said they didn’t want to spend the next several months in a political fight that would do nothing to address urgent needs.

Councilwoman Teresa Mosqueda voted against the repeal, saying the lack of a replacement strategy would mean more months of inaction.

Seattle’s so-called head tax would have charged companies about $275 per full-time worker each year to fund affordable housing and homeless services.

Some experts saw Amazon’s win offered a warning to cities bidding for the retailer’s second headquarters that the company would go to the limit to get its way.